Our approach to investment grade credit investing

Our portfolio construction process draws from the firm’s broad research resources to integrate investment ideas generated through in-depth analysis. Investment grade bonds are assessed using our custom sector framework to efficiently allocate risk, rather than through traditional benchmark classifications for sectors or industries. In this way, our investment grade strategies seek to break down credit markets in a distinct manner, seeking to add value through the discovery of additional sources of alpha and risk reduction. Portfolio construction is enhanced by our global collaborative team-based approach and the integration of ESG factors into our investment process.

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Benefits

Investment grade bonds offer the potential benefits of attractive yields and enhanced diversification. Our unique approach to portfolio construction expands these benefits with the objective of delivering consistent excess returns to the benchmark. We seek to achieve this with lower correlation to both the direction of credit markets and to peers, while providing downside protection in bear markets.

Portfolio construction

Our proprietary risk allocation process uses custom sectors and targets volatility to match that of the benchmark. This allows a more flexible approach to allocate risk to our best idiosyncratic ideas while generating alpha from multiple sources.

Connected thinking

Our portfolios benefit from the cross-pollination of ideas from our global investment professionals across all asset classes, within an integrated research framework across equities and credit with strong in-house ESG expertise.

Responsibility built-in

An integral part of our investment process, we believe active integration of ESG factors, combined with coordinated company engagement, broadens our opportunity set, helps deliver better downside protection and leads to more sustainable outcomes for clients.

Investment grade credit strategies

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 investment grade corporate bonds globally.

Aviva Investors US Investment Grade 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 US investment grade corporate bonds.

Key risks

For further information on the risks and risk profiles of our funds, please refer to the relevant KIID and Prospectus.

Investment 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 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

Certain assets held in the funds could, by nature, be hard to value or to sell at a desired time or at a price considered to be fair (especially in large quantities), and as a result their prices could be very volatile.

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