Our approach to investment-grade credit
Investment grade bonds offer the potential benefits of attractive yields and enhanced diversification. Our unique approach to portfolio construction helps capture these benefits and deliver consistent returns relative to the benchmark. We seek to achieve this with lower correlation to credit markets and peers, while still providing downside protection.
Portfolio construction
Our proprietary risk allocation process uses custom sectors and targets volatility to match the benchmark. This allows a more flexible risk allocation approach when incorporating our best idiosyncratic ideas, while also generating returns from multiple sources.
Focussed portfolio
We complement our portfolio construction process with high-conviction stock selection. We manage concentrated portfolios of fewer issuers than competitors, drawing on our expertise in fundamental credit analysis. This can lead to excess returns uncorrelated to market beta and low correlation with peers.
Connected thinking
Our team and processes are global, allowing us to allocate to the most attractive opportunities, regardless of currency, from issuers around the world. Environmental, Social and Governance (ESG)* considerations and engagement play a critical role in our stock selection, holding equal importance alongside other risk factors.
The investment manager always applies the Firm’s Baseline Exclusions Policy and any specific constraints within a prospectus or IMA, but any other ESG factors or risk considerations are adopted at the manager’s discretion.
All change: Positioning for a new market regime and climate action in IG credit
Justine Vroman and Tom Chinery discuss the opportunities in investment-grade credit to drive climate action.
Strategies in focus
Our longstanding team of portfolio managers follow a consistent approach across our range of investment-grade capabilities, including our flagship Global Investment Grade and Climate Transition Global Credit strategies.
While we run focussed portfolios with consideration of non binding ESG risk factors across the range, the Climate Transition Global Credit strategy has a specific objective to invest in bonds of companies which are deemed to be responding to climate change effectively, whilst earning income and increasing the value of the shareholder’s investment vs benchmark (over the long term).
Aviva Investors Global Investment Grade Corporate Bond Fund
This strategy aims to deliver positive and consistent excess returns through all market cycles, irrespective of, and uncorrelated to, the behaviour of credit spreads by investing mainly in global investment grade corporate bonds.
Aviva Investors Climate Transition Global Credit Fund
This strategy lends to investment grade companies globally that are either providing solutions to climate change or orientating their business models to a low-carbon economy, while avoiding the most carbon intense fossil fuel based companies.
Key risks
For further information on the risks and risk profiles of our funds, please refer to the relevant KIID and Prospectus.
Investment and currency risk
The value of an investment and any income from it can go down as well as up and can fluctuate in response to changes in currency and exchange rates. Investors may not get back the original amount invested.
Credit and interest rate risk
Bond values are affected by changes in interest rates and the bond issuer's creditworthiness. Bonds that offer the potential for a higher income typically have a greater risk of default.
Illiquid securities risk
Some investments could be hard to value or to sell at a desired time, or at a price considered to be fair (especially in large quantities). As a result their prices can be volatile.
Sustainability risk
The level of sustainability risk may fluctuate depending on which investment opportunities the Investment Manager identifies. This means that the fund is exposed to Sustainability Risk which may impact the value of investments over the long term.
Investment-grade credit team
Justine Vroman
Senior Portfolio Manager
Chris Higham
Senior Portfolio Manager
Thomas Chinery
Senior Portfolio Manager
Fixed income views
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From tactical to strategic: Investing in emerging-market hard currency debt in your fixed income portfolio
18 Nov 2024
Investors should consider EMD hard currency for a long-term strategic allocation within fixed income portfolios to boost portfolio returns, rather than just a short-term tactical play.
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Bond Voyage: A journey into fixed income
4 Nov 2024
This month, our fixed-income investment teams discuss US elections, IMF meetings, US versus European high yield, managing declining rates for cash, and what the future might hold in store for gilts.
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Resisting the lure of beta: A differentiated approach to portfolio construction in investment grade
18 Oct 2024
Global head of investment-grade credit James Vokins explains how a differentiated approach to portfolio construction can help credit investors avoid the pitfalls of being reliant on beta.
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Power play: Why political risk matters for emerging-market debt investors
11 Oct 2024
In this article, we explore why measuring and continually monitoring geopolitical risks is essential for investors in EM debt.
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Bond Voyage: A journey into fixed income
10 Oct 2024
In our October edition of Bond Voyage, our fixed-income teams reflect on US elections, US rates, France’s slide towards the periphery of EU issuers, and ESG considerations in Asia.
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Multi-asset allocation views: Where next for markets after the summer storms?
9 Oct 2024
Volatility returned to markets in the third quarter of the year. While the short-term drivers are not unduly worrying, Sunil Krishnan argues multi-asset investors will need to be watchful over the medium term.
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Bond Voyage: A journey into fixed income
16 Sep 2024
This month, we discuss the books that inspired our investment teams over the summer.
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Standing tall: Three factors behind the resilience of emerging-market debt
13 Sep 2024
In this article, we explore what’s behind emerging markets’ impressive performance in the face of global economic volatility, and investigate how EM debt investors can take advantage.
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An ABS renaissance? Why it may be time for insurers to reconsider asset-backed securities
2 Sep 2024
Securitisation performs a vital role in capital markets and asset-backed securities have historically been a core holding for insurance companies. This article revisits the investment thesis for ABS and explores why the stage may be set for something of a renaissance.
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Bond Voyage: A journey into fixed income
9 Aug 2024
In this summer edition of Bond Voyage, we discuss topical themes in liquidity, emerging-market debt, investment-grade credit and global sovereign bonds.
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Time to get active: Finding opportunities in emerging-market debt
30 Jul 2024
Emerging markets have remained robust amid the economic and political uncertainties of 2024, but active management will be important if debt investors are to identify standout performers over the coming months.
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Riding the technical tailwinds: The outlook for investment-grade credit
25 Jul 2024
Credit markets have had a comparatively easy ride so far in 2024, and investment-grade corporate spreads are now at some of their tightest levels for a long time. But investors must guard against complacency.
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Liquidity optimisation for insurers: Building a bespoke portfolio solution
9 Jul 2024
In the third part of our liquidity optimisation series, we look at how bespoke liquidity portfolios that take into account the interplay between different assets can suit the needs of insurers.
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Finding the right blend: Optimising asset allocation in liquidity pools
5 Jul 2024
In the second part of our new article series on liquidity optimisation, Alastair Sewell investigates how investors can find the right mix of assets for their liquidity pools.
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The difficult last mile: Inflation, Treasury supply and the outlook for global sovereign bonds
4 Jul 2024
With the focus shifting from interest rate cuts to the likelihood of rates staying higher for longer, Steve Ryder and Daniel Bright assess the possible outcomes and implications of higher rates and monetary policy divergence in debt markets.
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Bond Voyage: A journey into fixed income
2 Jul 2024
In a special European Championships edition of Bond Voyage, we discuss topical themes in liquidity, emerging-market debt, investment-grade credit and global sovereign bonds (with a little help from Cristiano Ronaldo and Kylian Mbappé).
Explore our fixed income range
Need more information?
For further information, please contact our investment sales team.