Multi-Sector Strategic Credit

Investment Objective

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

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.

Available Vehicles

Available Vehicles

Collective Trust

Investment Philosophy

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.

Sector Allocation:

100 bps

 

Subsector and Security Selection:

50 bps

 

Duration/Curve/Currency:

15 bps

Investment Process

PGIM Fixed Income employs a disciplined, three-step investment process to manage Strategic Credit portfolios:

  1. Senior investment team assesses global market environment:

    • Economic research
    • Sector analysis
  2. Senior portfolio managers construct portfolio with sector specialists and analysts

    Risk Budgeting

    • Establish risk targets within client's risk budget

    • Capture thresholds for systematic and idiosyncratic risks
    Arrow Right

    Asset Allocation

    • Determine risk, sector, and term structure positioning

    • Incorporate themes given current market dynamics

    • Ideas from sector specialists are emphasized
    Arrow Right

    Security Selection

    • Sector specialists and research analysts aligned by industry determine individual securities

    • Research-based approach
  3. Senior portfolio managers and risk managers oversee risk positions

Senior Portfolio Managers

 

Michael Collins

CFA, Managing Director and Senior Portfolio Manager

 

Gregory Peters

Managing Director and Senior Portfolio Manager

 

Richard Piccirillo

Managing Director and Senior Portfolio Manager