Robeco announces the launch of a multi-factor credit fund. With Robeco Global Multi-Factor Credits, factor investing is brought to credit markets, allowing investors to benefit from similar factors to those that have proven successful in equity markets including low-risk, value and momentum.
Robeco Global Multi-Factor Credits, avalaible in Latam & US- offshore, offers a diversified and balanced exposure to investment grade corporate bonds that score well on these factors, and will have 150-200 names in the portfolio. The fund aims to generate higher returns with a market-like risk profile. Although the fund mainly invests in investment grade credits, it can hold a maximum of 10 percent in BB to benefit from the attractive characteristics of fallen angels and rising stars. Robeco Global Multi-Factor Credits is targeted at experienced investors looking for style- diversification in a balanced portfolio.
The fund will be managed by Robeco’s Credit Team. The fund’s portfolio manager is Patrick Houweling, who joined Robeco in 2003. Houweling has also been managing Robeco’s conservative credits strategy since 2012, which exploits the low-risk anomaly in credit markets. In an academic study published last year, Houweling and his colleague Jeroen van Zundert illustrated that factor strategies can also be attractive in credit markets. Next to the three factors low-risk, value and momentum applied in Robeco’s equity factor strategies, the credit strategy also includes a size factor. Amongst others, size captures a liquidity effect that is more present and important in less liquid asset classes like corporate bonds.
Patrick Houweling: “At Robeco, we have been closely studying the possibilities of bringing our factor investing offering beyond the traditional equity markets. I am delighted that we have put theory into practice by introducing this factor investing fund to credit investors. This fund is driven by our proprietary quantitative multi-factor model, which offers balanced exposure to the low-risk, value and momentum factors.”