View more on these topics

Thames River runs with credit funds

Thames River Capital has introduced two Ucits III compliant global credit funds to complement its high income fund.

Credit select and global credit provide diversification across the credit spectrum and on a global basis, with different risk profiles.

Credit select will invest mainly in investment grade corporate bonds in developed global markets. The average credit quality of holdings will be A, with around 90 per cent of the portfolio going into investment-grade bonds and up to 10 per cent in high-yield bonds with lower credit ratings.

The fund has a target yield of 4 to 5 per cent an year, paid quarterly.The priority is producing this level of income while preserving capital, but there will be some scope for capital growth.

The global credit fund has a higher risk profile than credit select, which also increases the potential returns. Global credit has a target yield of 6.5 per cent and invests mainly in corporate bonds with an average credit quality of BBB. Investment-grade bonds in developed markets will make up around 60 per cent of the portfolio, with the remainder going in to high yield and emerging market bonds. Both funds can use futures and options to preserve capital in volatile market conditions.

The funds are managed by Stephen Drew and Mehrdad Noorani, with input from Bernt Tallaksen. Drew joined Thames River in June, having previously managed a relative value credit portfolio at Tudor Capital. Noorani joined Thames River in 2005 from UFJ, where he focused on volatility strategies, while Tallaksen has spent the last 11 years at Thames River.

According to Thames River, credit is a sweet spot that should outperform as the markets return to normal. These funds will be able to take advantage of cheap valuations that have resulted from the recent sell-off.

The ability to use derivatives is useful but is a sophisticated investment strategy. The Thames River team’s previous experience in this area will be vital to the success of the new funds.

Recommended

Newton’s Russon looks for value in non-cyclicals

Newton UK equities manager Ben Russon is seeking opportunities in non-cyclical parts of the UK equity market and is steering clear of financials and stocks with domestic consumer exposure. At a Newton global outlook for 2010 round table in London last week, Russon shrugged off the recent bounce in financial stocks in the market, saying […]

Powerful estate planning tools ignored or forgotten by wealthy Brits

Canada Life IHT Survey 2016 Only a quarter of wealthy Brits have sought professional estate planning advice to ensure their families don’t pay more tax than required More than a quarter don’t even have a will and just one in five have gifted money Many say they do not need these tools but families would […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com