Abrdn launches institutional multi-sector credit fund

Fund aims to address demand for liquid multi-sector credit solutions

Jonathan Stapleton
clock • 1 min read
Mark Munro: The fund will give investors exposure to US, Europe and EM fixed income markets
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Mark Munro: The fund will give investors exposure to US, Europe and EM fixed income markets

Abrdn has launched a multi-sector credit fund designed primarily for defined benefit (DB) and defined contribution (DC) pension schemes.

The asset manager said the fund - the Multi-Sector Credit Fund OEIC III - can invest across a wide spectrum of fixed income asset classes, including investment grade, high yield, leverage loans, emerging market corporates, Asian credit, floating-rate asset backed security, subordinated financials and corporate hybrids.

It said the fund aimed to address the demand from DB and DC schemes for liquid multi-sector credit solutions, diversifying away from traditional sterling assets.

Abrdn said the fund is targeting the ground between traditional sterling buy-and-maintain and higher risk multi-sector credit products - aiming to target a spread pick-up of at least 100 basis points over sterling investment grade bonds.

It added the fund would aim to deliver higher risk-adjusted returns to sterling investment grade, but without the higher levels of risk often associated with multi-sector credit funds.

Mark Munro is the investment director and fund manager for the fund. He said: "We're really excited to launch the multi-sector credit fund, adding to our suite of unconstrained credit products.

"While 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 said the fund aims to exceed the return of SONIA by 2.50% per annum over rolling five-year periods.

A feeder vehicle for this fund has been created on Abrdn's life and pensions platform - called the Abrdn Life Multi-Sector Credit Fund - in a bid to build on the fund range available for the Abrdn pensions master trust.

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