BNY Mellon Investment Management (BNY Mellon IM), one of the world’s largest asset managers with $1.9 trillion in assets under management, today announces the launch of the BNY Mellon Floating Rate Credit Fund.
The Fund is managed by Insight Investment (Insight), a £629.8bn global asset manager with £187.4bn under management in fixed income assets. It invests primarily in floating rate debt and is designed to provide income while also protecting against interest rate volatility by maintaining low interest rate duration. It meets the requirements of Article 8 of the EU Sustainable Finance Disclosures Regulation.
As floating rate credit has a lower sensitivity to interest rate changes versus fixed rate debt instruments, it is an asset class which can potentially provide investors with an attractive risk and return profile of loan-like returns and lower capital volatility in a rising rate environment. In addition, a focus on floating rate debt can offer opportunities in the current climate where yields are higher at shorter maturities, because it creates scope for harvesting a higher yield on the front end.
The Fund’s management team is led by Senior Portfolio Manager Ulrich Gerhard alongside Portfolio Managers Cathy Braganza and Lorraine Specketer. The team, which has an average industry experience of more than 25 years and deep expertise in high yield, loans and bottom-up credit analysis, also manages the well-established BNY Mellon Global Short-Dated High Yield Fund. This Fund was launched in 2016 and has proved popular with investors, as reflected in its USD708.7m in assets under management. The management team is supported by Insight’s Fixed Income Group, which comprises of 166 investment professionals globally.
Ulrich Gerhard, Senior Portfolio Manager at Insight, said: “We favour sectors that we view as offering attractive asset valuations which operate in stable competitive environments and have high barriers to entry. Our emphasis is on issuers which we believe to have a strong business model, appropriate capital structure and resilient cashflows, implying a clear path to repayment and reduced risk of defaults.”
Matt Oomen, Global Head of Distribution at BNY Mellon Investment Management, said: “Insight’s strategy emphasises bottom-up credit analysis and cashflow generation, delivered by a portfolio management team with broad and deep expertise in fixed income. The team uses qualitative and quantitative approaches to identify sources of excess return at sector, issuer and security level.”
The Fund is part of the Ireland-domiciled BNY Mellon Global Funds, plc range and will be registered for sale in Austria, Belgium, Denmark, Finland, France, Germany, Italy, Luxembourg, Netherlands, Norway, Sweden, Switzerland, Spain, United Kingdom.