DC schemes can use Global Total Return Credit (GTRC) as an all-weather credit strategy; a flexible building block across the different stages of a member’s saving journey:
Phase |
Wealth accumulation |
Consolidation |
Pre retirement |
Through retirement |
DC member needs and challenges |
– Investors seek to maximise wealth accumulation opportunities. |
– Growth remains a key focus, given the power of compounding returns. |
– In a diverse drawdown portfolio, the balance between growth and capital preservation moves to the fore. |
– Focus shifts to de-risking and moving to more defensive, income-paying assets. |
How GTRC is relevant |
– Diversifying growth asset allocation into a credit strategy adds a new source of return potential, driven by income-generating assets. – Robust integration of sustainability considerations ensures all relevant risks are considered. |
– GTRC can play an increasingly important role, complementing equities and multi-asset solutions which are typically underweight credit. |
– GTRC plays an important diversification role and offers differentiated return drivers to traditional fixed income, with less exposure to the risks presented by interest rate moves. |
– GTRC can play a key income-generating role, as well as seeking to achieve long-term capital growth. It also takes care of difficult asset allocation decisions within fixed income. |
Demonstrating incremental progress on a pathway to net zero
Achieving Net Zero0.0% |
Aligned to a Net Zero Pathway17.7% |
Aligning to a Net Zero Pathway22.0% |
Committed to Aligning22.4% |
Has Potential to Transition37.9% |
Is not aligned or has low potential to transition0.0% |
Source: Ninety One as at 30 September 2024. Based on all scored portfolio holdings, excludes cash, synthetics and others. Rebased to 100.
Please note that the above should not be viewed as an indication that the fund has a non-financial outcome as part of its investment objective.
01We seek to be defensive in downturns and to capture upside consistently through the market cycle, resulting in a smoother path of returns for members through to retirement |
02Proprietary sustainability framework identifies enduring companies with well-defined approaches to navigating the transition to a low-carbon world |
03Investment process designed to identify mispricing opportunities made available by the biases and inefficiencies that influence individual asset classes |
04Daily liquidity and competitive pricing available on LGIM and Mobius DC Platforms |
Global credit across developed and emerging markets
Yield: | 6.0% |
Duration: | 3.5 |
Average rating: | BBB- |
Number of issuers: | 187 |
The amount of income payable may rise or fall.
Source: Ninety One, 30 September 2024.
This portfolio may change significantly over a short period of time.
For the purposes of displaying more coherent portfolio information cash and synthetics have been removed from charts and the residual exposure is grossed up to sum to 100%.
1 ‘Best Ideas’ represents our highest conviction ideas following an analysis of fundamentals, valuation and market price behaviour.
General risks: All investments carry the risk of capital loss. The value of investments, and any income generated from them, can fall as well as rise and will be affected by changes in interest rates, currency fluctuations, general market conditions and other political, social and economic developments, as well as by specific matters relating to the assets in which the investment strategy invests. If any currency differs from the investor’s home currency, returns may increase or decrease as a result of currency fluctuations. Past performance is not a reliable indicator of future results. Environmental, social or governance related risk events or factors, if they occur, could cause a negative impact on the value of investments.
Specific Risks: Default: There is a risk that the issuers of fixed income investments (e.g. bonds) may not be able to meet interest payments nor repay the money they have borrowed. The worse the credit quality of the issuer, the greater the risk of default and therefore investment loss. Derivatives: The use of derivatives may increase overall risk by magnifying the effect of both gains and losses leading to large changes in value and potentially large financial loss. A counterparty to a derivative transaction may fail to meet its obligations which may also lead to a financial loss. Interest rate: The value of fixed income investments (e.g. bonds) tends to decrease when interest rates rise. Liquidity: There may be insufficient buyers or sellers of particular investments giving rise to delays in trading and being able to make settlements, and/or large fluctuations in value. This may lead to larger financial losses than might be anticipated. Government securities exposure: The Fund may invest more than 35% of its assets in securities issued or guaranteed by a permitted sovereign entity, as defined in the definitions section of the fund’s prospectus.
In a market dominated by passive equity and fixed income offerings, Ninety One brings something different to the table, with a range of actively managed, sustainable Defined Contribution (DC) solutions. We believe the long-time horizon of DC scheme members is intrinsically linked with sustainability considerations, as the world moves towards carbon neutrality by 2050.