With yields still at extremely low levels, you have to make your assets work harder to generate attractive risk adjusted returns and income for your clients. This is particularly true for government bonds, where yields have dropped to unprecedented lows. In this environment, actively managed credit (or corporate bonds), is a potential source of higher returns, attractive income and diversification.
With thousands of issuers to select from, credit is a hugely diverse and growing asset class. To harness the strongest opportunities, while avoiding pitfalls, credit funds need to be managed with intelligence and precision. To do this effectively, and act on ideas quickly, takes in depth, forward-looking research and experience.
In a connected and interdependent world, a global perspective is vital in making the best decisions. We have approximately 100 credit experts based in nine locations worldwide who provide local insight and expertise. Our credit teams are part of a multi-discipline research platform at Schroders, who can draw on the knowledge of our in-house experts within equities, ESG, commodities, property, etc.
We have the right level of resources to ensure that each opportunity is analyzed in depth, the return potential evaluated and the risks assessed. Yet we retain the flexibility to move quickly and act with conviction, aiming to deliver value at each stage of the business cycle.
Past performance is not a guide to future performance and may not be repeated.
The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested. Exchange rate changes may cause the value of any overseas investments to rise or fall.
A rise in interest rates generally causes bond prices to fall.
A decline in the financial health of an issuer could cause the value of its bonds to fall or become worthless.
The views and opinions contained herein are those of the authors, and may not necessarily represent views expressed or reflected in other Schroders communications, strategies or funds. This webpage is intended to be for information purposes only. The material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The material is not intended to provide, and should not be relied on for, accounting, legal or tax advice, or investment recommendations. Information herein is believed to be reliable but Schroders does not warrant its completeness or accuracy. No responsibility can be accepted for errors of fact or opinion. Reliance should not be placed on the views and information in the webpage when taking individual investment and/or strategic decisions. Past performance is not a reliable indicator of future results, prices of shares and the income from them may fall as well as rise and investors may not get back the amount originally invested. All investments, domestic and foreign, involve risks including the risk of possible loss of principal. Investing in equities involves risk considerations, including market risk, prospects of stocks in the portfolio, changing interest rates, and real or perceived adverse competitive industry conditions. Investing in bonds may include interest rate, credit, inflation/deflation risk, mortgage and asset-backed securities, U.S. Government securities, and liquidity risks, to varying degrees. Investing overseas involves special risks including among others, risk related to political or economic instability, foreign currency (such as exchange, valuation, and fluctuation) risk, market entry or exit restrictions, illiquidity and taxation. These risks exist to a greater extent in emerging markets than in developed markets. The use of derivatives involves risks different from, or possibly greater than, the risks associated with investing directly in the underlying assets. Private assets are intended only for qualified and/or sophisticated investors and carry special risk considerations, including illiquidity risk, wide differences in valuations, the use of leverage, and higher credit risk than traditional assets. Asset allocation and diversification cannot ensure a profit or protect against loss of principal. No investment strategy, capability or technique can guarantee it will achieve its stated objective. UK Investors: The data contained in this webpage has been obtained from sources we consider to be reliable. No responsibility can be accepted for errors of fact and the data should be independently verified before further publication or use. The sectors shown are for illustrative purposes only and not to be considered a recommendation to buy or sell. Exchange rate changes may cause the value of any overseas investments to rise or fall. In North America, this content is issued by Schroder Investment Management North America Inc., an indirect wholly owned subsidiary of Schroders plc providing asset management products and services as a US SEC registered investment adviser and in the capacity of Portfolio Manager with the securities regulatory authorities in Canada. For all other users, this content is issued by Schroder Investment Management Limited, 31 Gresham Street, London, EC2V 7QA. Registered No. 1893220 England. Authorized and regulated by the Financial Conduct Authority.