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Investment Grade Credits Financials

Investment Grade Credits Financials

Diversified exposure to the bonds of banks and insurers in different parts of the capital structure

Key points:

  • Banking and insurance sector investment case is strongly supported by improving capital ratios 
  • Dedicated team of portfolio managers and analysts selects the most attractive issuers 
  • ESG research is integrated into the investment process to help assess the downside risk

Philosophy

The case for financial bonds is highly compelling as a result of the Basel III capital adequacy regulations for banks and Solvency II rules for insurers. Traditional subordinated bonds and new types of capital – particularly hybrid instruments – offer attractive investment opportunities as these instruments tend to have significantly higher spreads than senior debt.

Process

In our research process we combine a top-down market view to assess credit attractiveness and factors that drive credit markets in the short term with skillful issuer selection to create a broadly diversified portfolio. In this respect, avoiding losers is more important than picking winners. The portfolio manager takes country risks actively into consideration in choosing where to invest.

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Team

Portfolio managers make investment decisions based on in-depth issuer analysis carried out by a highly experienced team of career credit analysts.

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Disclaimer

BY CLICKING ON “I AGREE”, I DECLARE I AM A WHOLESALE CLIENT AS DEFINED IN THE CORPORATIONS ACT 2001.

What is a Wholesale Client?
A person or entity is a “wholesale client” if they satisfy the requirements of section 761G of the Corporations Act.
This commonly includes a person or entity:

  • who holds an Australian Financial Services License
  • who has or controls at least $10 million (and may include funds held by an associate or under a trust that the person manages)
  • that is a body regulated by APRA other than a trustee of:
    (i) a superannuation fund;
    (ii) an approved deposit fund;
    (iii) a pooled superannuation trust; or
    (iv) a public sector superannuation scheme.
    within the meaning of the Superannuation Industry (Supervision) Act 1993
  • that is a body registered under the Financial Corporations Act 1974.
  • that is a trustee of:
    (i) a superannuation fund; or
    (ii) an approved deposit fund; or
    (iii) a pooled superannuation trust; or
    (iv) a public sector superannuation scheme
    within the meaning of the Superannuation Industry (Supervision) Act 1993 and the fund, trust or scheme has net assets of at least $10 million.
  • that is a listed entity or a related body corporate of a listed entity
  • that is an exempt public authority
  • that is a body corporate, or an unincorporated body, that:
    (i) carries on a business of investment in financial products, interests in land or other investments; and
    (ii) for those purposes, invests funds received (directly or indirectly) following an offer or invitation to the public, within the meaning of section 82 of the Corporations Act 2001, the terms of which provided for the funds subscribed to be invested for those purposes.
  • that is a foreign entity which, if established or incorporated in Australia, would be covered by one of the preceding paragraphs.
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