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Schroders launches first value-focused HY fund

Schroders launches first value-focused HY fund

Schroders has broadened its bond fund range with what the asset manager says is the first value-focused high yield credit fund, Citywire can reveal.

The Schroder ISF Global Value Credit fund, which was launched on January 18, will focus on out-of-favor market segments with the aim of providing a high total return.

It will be overseen by Konstantin Leidman, who is Citywire AAA-rated and currently oversees the Schroder ISF EURO High Yield fund.

In this new approach, Leidman will be unconstrained by a benchmark, which is designed to bolster his contrarian investment approach. He will focus on corporate bonds, financial issuers, convertibles and other securities.

Commenting on the launch, Leidman said: ‘We will focus on sectors and regions that have been hit hard by negative investor sentiment and aim to identify issuers in these groups that have been undeservingly punished.

‘They may be unloved due to some political or other bias, or simply unfashionable; overlooked or under-researched where investors are absent and valuations are very cheap.’

Leidman said the investment philosophy is based on minimizing the risk of permanent capital loss and applying a large margin of safety. ‘This means we aim to buy bonds for significantly below their intrinsic value to maximize returns and minimize losses.’

A Schroders spokesperson added that the fund, which is Luxembourg-domiciled and currently registered for sale in France, will adopt a Benjamin Graham-style, bottom-up selection process for uncovering credit investments.

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