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The investment objective of the Strategic Credit strategy is to outperform a custom blended benchmark comprised of 33% U.S. high yield, 33% U.S. bank loans, and 33% emerging market debt by +165 bps over a full market cycle. The investable universe includes benchmark sectors, plus opportunistic allocations to non-benchmark sectors and derivatives.1,2
The Strategic Credit Strategy is an actively managed strategy designed to capture our “best ideas” primarily in below investment grade credit by dynamically allocating between higher yielding credit sectors in response to changing market opportunities with the goal of maximizing risk-adjusted returns. The approach combines active rotation across higher yielding credit sectors, bottom-up research-driven subsector/security selection, modest duration/yield curve/currency exposure, and the daily monitoring and management of risk.
PGIM Fixed Income employs a disciplined, three-step investment process to manage Strategic Credit portfolios:
1 There is no guarantee that these objectives will be met.
2 On average, over a full market cycle defined as three to five years.
No risk management technique can guarantee the mitigation of elimination of risk in any market environment.
Source: PGIM Fixed Income as of December 31, 2020.