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.

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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 robust integration of ESG risk factors across the range, the Climate Transition Global Credit strategy offers the additional objective to achieve positive climate outcomes to support the transition to a low-carbon world.

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

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