The Dreyfus Corporation, a BNY Mellon company, announced that it has introduced the Dreyfus Floating Rate Income Fund, an actively managed mutual fund designed to seek high current income by investing in floating rate loans and other floating rate securities. The fund is sub-advised by Alcentra NY, LLC, a BNY Mellon global investment firm specializing in sub-investment grade credit. Dreyfus is the fund’s investment advisor.
“Floating rate loans could be attractive to investors seeking an asset class with lower interest rate sensitivity, seniority in a company’s capital structure and diversification potential as floating rate loans generally exhibit low correlation to other asset classes,” said Dreyfus President Charles Cardona. “The loan market has traditionally catered to large, institutional investors. The new fund provides access to a broad range of investments not generally available to individual investors. We’re pleased to provide U.S. investors access to the investment expertise of Alcentra, one of the top global loan managers.”
William Lemberg and Chris Barris are the fund’s primary portfolio managers. Lemberg is the fund’s portfolio manager principally responsible for floating rate loans and other floating rate securities. He is a managing director, senior portfolio manager and head of Alcentra’s U.S. loan platform. Lemberg has been employed by Alcentra since 2008. Barris is also the fund’s portfolio manager principally responsible for high yield, fixed-rate securities. He is a managing director, senior portfolio manager and head of global high yield at Alcentra. Barris has also been a senior portfolio manager for the Dreyfus High Yield Fund since 2007.
Alcentra employs a value-oriented, bottom up research process that incorporates a macroeconomic overlay to analyze investment opportunities. This includes evaluating default trends, performance drivers and capital market liquidity. Alcentra’s fundamental credit analysis identifies favorable and unfavorable risk/reward opportunities across sectors, industries and structures while seeking to mitigate credit risk.
“We seek to reduce credit risk through a disciplined approach to the credit investment selection and evaluation process,” said David Forbes-Nixon, Alcentra’s Chairman and CEO. “Long term investors, who are looking for consistent returns and anticipating a rising rate environment, may want to consider the Dreyfus Floating Rate Income Fund. The fund seeks to deliver current income, enhanced principal protection and capital appreciation potential.”
To pursue its goal, the fund normally invests at least 80% of its net assets, plus any borrowings for investment purposes, in floating rate loans and other floating rate securities. These investments, may include: (1) senior secured loans, (2) second lien loans, senior unsecured loans and subordinated loans, (3) senior and subordinated corporate debt obligations (such as bonds, debentures, notes and commercial paper), (4) debt obligations issued by U.S and foreign governments, their agencies and instrumentalities, and debt obligations issued by central banks, and (5) fixed-rate loans or debt obligations with respect to which the fund has entered into derivative instruments to effectively convert the fixed-rate interest payments into floating rate interest payments. The fund may also invest up to 20% of its net assets in the securities of foreign issuers and up to 20% of its net assets in high yield instruments.