Fund update

Hermes Multi Strategy Credit

You will have now received our October issue of Viewpoint (if you haven't please let us know and we will get one in the post to you, or read it online) which featured Hermes Investment Management, within the Boutique section.

The Hermes Multi Strategy Credit fund is managed by Hermes Credit co-head Fraser Lundi and Senior Credit Portfolio Manager Raphael Muller. Hermes have managed the BT pension fund for many years, and are now offering their funds to retail investors for the first time.

James Yardley, Research Analyst at Chelsea, recently met with Fraser, to find out more about the fund.

“Fraser is an intelligent manager who is aware of the risks in the high yield sector. He recognises the real dangers in the market and believes his fund is well positioned to weather any future difficulties. This well-resourced fund offers investors something very different from what is already on the market.”

The fund launched on 1st May 2013 and is somewhere between a high yield strategic bond and an absolute return fund.

High yield bonds have delivered equity like returns with half the volatility for 40 years. This is now under threat in the post-financial crisis world. Yields on bonds have now been pushed so low that it is unlikely that there will be much capital growth from high yield bonds in the near future.

This is an unconstrained fund that can invest globally, with two thirds of the fund invested in its best credit ideas, and the remaining third of the fund in defensive strategies. The aim of the fund is to capture 80%* of the upside and only 50%* of downside with performance similar to high yield credit, but with lower volatility.

We have meetings with Hermes regarding the Asia ex-Japan Equity fund in the coming weeks, so there will be more details on this fund in the next newsletter.

The fund has returned 6.56%* since May 2014 versus 3.16%* for its sector.

Please read the Key Investor Information Documents for this fund

                                                                                                                 


James' views are entirely his own and do not constitute as financial advice.

*FE analytics, 1st May 2014 – 30th October 2014