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