abrdn launches Multi-Sector Credit Fund

abrdn has launched the Multi-Sector Credit Fund OEIC III (“the Fund”) designed for institutional clients, primarily Defined Benefit (DB) and Defined Contribution (DC) pension schemes.

The Fund can invest across a wide spectrum of fixed income asset classes, including Investment Grade (IG), high yield, leverage loans, Emerging Market (EM) corporates, Asian Credit, floating-rate asset backed security, subordinated financials and corporate hybrids.

The Fund addresses the demand from DB and DC pension schemes for liquid multi-sector credit solutions, diversifying away from traditional sterling assets. Targeting the ground between traditional sterling buy-and-maintain and higher risk multi-sector credit products, the Fund aims to target a spread pick-up of at least 100bps over sterling IG bonds. The Fund will seek to deliver higher risk-adjusted returns to sterling IG, but without the higher levels of risk often associated with multi-sector credit funds. This is measured within the Fund objective by seeking to generate income and some growth over the long term (5 years or more) by investing both directly and indirectly in bonds issued anywhere in the world

Mark Munro, investment director and fund manager for the Multi-Sector Credit Fund, said:

“We’re really excited to launch the Multi-Sector Credit Fund, adding to our suite of unconstrained credit products. Whilst we believe the strategy will be attractive to many investors, we have designed the Fund specifically for DB and DC pension schemes. The Fund will give investors exposure to US, Europe and EM fixed income markets and should improve diversification and lower sector and stock risks for pension schemes.”

abrdn has 140+ fixed income investment professionals (with c. £136bn AUM) based across the globe, providing insights into local markets.

The Fund is a globally diversified fixed income solution with moderate volatility, an average investment grade rating and a short to medium term interest rate risk profile (2-5 years). The Fund aims to exceed the return of SONIA by 2.50% p.a. over rolling five-year periods (gross).’To build on the fund range available for the new abrdn pensions master trust, a feeder fund has been created on the abrdn Life & Pensions platform, abrdn Life Multi-Sector Credit Fund, alongside the recently launched abrdn Life Sustainable Equity Tracker Funds.

Ends

Media enquiries

Debbie Cowe,
Media Relations Manager, abrdn
debbie.cowe@abrdn.com
+44 (0) 7711 774017

Notes to editors

Fund Summary

• Investment strategy - Dynamic and diversified access to global credit markets which is focussed on offering good liquidity, low volatility, an average investment grade rating and a short-to-medium term interest rate risk profile
• Return objective - to exceed the return of SONIA by 2.50% p.a. over rolling five-year periods, on a gross basis
• Average credit rating - Investment grade (BBB)
• Duration - 2-5 years Vehicle UK OEIC (NURS)
• Base currency GBP
• Share classes - Accumulation or income
• AMC 25bps

About abrdn

• abrdn is a global investment company that helps clients and customers plan, save and invest for the future. Our purpose is to enable our clients to be better investors.
• abrdn manages and administers £500bn of assets for clients (as at 31 December 2022).
• Our strategy is to deliver client-led growth. We are structured around three businesses – Investments, Adviser and Personal – focused on their changing needs.
• The capabilities in our Investments business are built on the strength of our insight – generated from wide-ranging research, worldwide investment expertise and local market knowledge.
• Our teams collaborate across regions, asset classes and specialisms, connecting diverse perspectives and working with clients to identify investment opportunities that suit their needs.
• As at 31 December 2022, our Investments business manages £376bn on behalf of clients - including insurance companies, sovereign wealth funds, independent wealth managers, pension funds, platforms, banks and family offices.

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Important Information - For Professional Investors only

The value of investments, and the income from them, can go down as well as up and you may get back less than the amount invested. Past performance is not a guide to future results. Tax treatment depends on the individual circumstances of each investor and may be subject to change in the future. We recommend that you seek financial advice prior to making an investment decision.

The details contained here are for information purposes only and should not be considered as an offer, investment recommendation, or solicitation to deal in any investments or funds and does not constitute investment research, investment recommendation or investment advice in any jurisdiction. Any research or analysis used to derive, or in relation to, the above information has been procured by us for our own use, without taking into account the investment objectives, financial situation or particular needs of any specific investor, and may have been acted on for own purpose. No warranty is given as to the accuracy, adequacy or completeness of the information contained in this communication and no liability for errors or omissions in such information. Readers must make assessments to the relevance, accuracy and adequacies of the information contained in this communication and make independent investigations, as they may consider necessary or appropriate for the purpose of such assessments. Any opinion or estimate contained in this communication, are made on a general basis.  No information contained herein constitutes investment, tax, legal or any other advice, or an invitation to apply for securities in any jurisdiction where such an offer or invitation is unlawful, or in which the person making such an offer is not qualified to do so.

abrdn Fund Managers Limited, registered in England and Wales (740118) at 280 Bishopsgate, London EC2M 4AG. Authorised and regulated by the Financial Conduct Authority in the UK.

Credit risk - The fund invests in securities which are subject to the risk that the issuer may default on interest or capital payments.

Interest rate risk - The fund price can go up or down daily for a variety of reasons including changes in interest rates, inflation expectations or the perceived credit quality of individual countries or securities.

High Yield Credit risk - The fund invests in high yielding bonds which carry a greater risk of default than those with lower yields.

Emerging Markets risk - The fund invests in emerging market equities and / or bonds. Investing in emerging markets involves a greater risk of loss than investing in more developed markets due to, among other factors, greater political, tax, economic, foreign exchange, liquidity and regulatory risks.

Asset Backed / Mortgage Backed Securities - The fund invests in mortgage and asset-backed securities (which may include collateralised loan, debt or mortgage obligations (respectively CLOs, CDOs or CMOs)). These are subject to prepayment and extension risk and additional liquidity and default risk compared to other credit securities.

Derivatives risk - The use of derivatives carries the risk of reduced liquidity, substantial loss and increased volatility in adverse market conditions, such as a failure amongst market participants. The use of derivatives may result in the fund being leveraged (where market exposure and thus the potential for loss by the fund exceeds the amount it has invested) and in these market conditions the effect of leverage will be to magnify losses.

Convertible Securities and CoCos risk - Convertible securities are investments that can be changed into another form upon certain triggers. As such, they can exhibit credit, equity and fixed interest risk. Contingent convertible securities (CoCos) are similar to convertible securities but have additional triggers which mean that they are more vulnerable to losses and volatile price movements and hence become less liquid.”

KIID - https://docs.publifund.com/kiid/GB00BQZBF600/en_GB
Prospectus - https://www.abrdn.com/docs?editionid=592a0cc9-2b88-4093-97ee-6eb1aca970e2