FIXED INCOME

Our fixed income team has three core areas of expertise: multi-sector global bonds, credit and emerging market debt. Meanwhile, our absolute return government bond team uses a unique forward rates-based process to target absolute returns from G-10 rates and inflation markets.

Merian Global Investors London-based fixed income team offers capabilities in multi-sector bonds (including both absolute-return and market-relative strategies), corporate bonds, including financials contingent capital bonds (often known as “CoCos”) and both local- and hard-currency emerging market bonds. The portfolio managers and analysts who specialise in these areas collaborate to share ideas on strategy, positioning and research – as well as developing a holistic view of the fixed income market. This collaborative structure is pivotal to our investment philosophy that having specialists in each of the major areas of fixed income, who work closely with one another, is crucial to finding value in today’s increasingly interconnected markets. In addition, our separate, Edinburgh-based absolute return government bond team employs a highly distinctive investment strategy focused on expressing views on macro themes through exposure to forward interest rates and inflation expectations. The strategy can express both positive and negative views on macro themes through positions in government bonds (primarily G-10 countries) and liquid derivatives on interest rates, inflation and foreign exchange.

Philosophy

Within multi-sector bond portfolios, our philosophy is to take an ‘all-weather’ approach, seeking to generate returns from interest rates, foreign exchange, credit, volatility and emerging markets. The managers place great emphasis on working within a centralised team, believing this brings the advantages of flexibility and coherence. The team offers both absolute return and market relative capabilities.

Investment team

Mark Nash is portfolio manager and head of global bonds, while Nicholas Wall is a portfolio manager. They are supported by the wider fixed income team.

Capabilities
  • Global, absolute return, multi-sector/strategic bonds

    Merian Strategic Absolute Return Bond Fund

    The fund is intended for investors seeking a long-term, diversified, actively managed fixed-interest investment; the managers aim to generate a gradual rise in the performance over time, regardless of broader market moves. Investment is focused on government and corporate bonds and currencies, with an emphasis on highly liquid assets, giving the portfolio managers flexibility to express their convictions while supporting an emphasis on maintaining liquidity and preserving capital. The fund can ‘short’ the market, to profit when prices fall, in order to help achieve consistent positive returns through a variety of market conditions.

  • Sub-advised capabilities

    Merian Total Return USD Bond Fund

    The Merian Total Return USD Bond Fund is managed by the world-renowned investor, Bill Gross of Janus Henderson Investors. The fund seeks to provide excess return versus the benchmark, together with capital preservation. Using a combination of top-down and bottom-up analysis, the manager adopts a long-term, secular style of investing while applying a short-term, cyclical overlay to his strategy. In order to source additional alpha, the manager will use sophisticated financial structures and techniques.

  • Global, market-relative, multi-sector/strategic bonds

    Merian Global Strategic Bond Fund (IRL)

    A multi-sector, actively managed global fixed income strategy that aims to deliver returns in evolving market conditions. Alpha can be generated through several sources, including interest rates, foreign exchange, credit, emerging market debt, and volatility.

Philosophy

The team places great emphasis on robust quantitative research, believing that this can help avoid behavioural biases and take advantage of market inefficiencies. It believes in accessing markets early and in considering a broad universe for investment opportunity. The team analyses the drivers of the asset class in depth, including global monetary policy, emerging market growth, changes in China’s economy, and emerging market domestic policy and reforms.

Investment team

Highly experienced emerging market debt portfolio manager Delphine Arrighi is supported by Patty Cao, assistant portfolio manager.

Capabilities
  • Hard currency emerging market debt

    Merian Emerging Market Debt Fund

    The strategy is characterised by an active management style that is dynamic and flexible, separating sources of sovereign return. The three key components of risk and return are external debt, local rates and currency. The strategy combines a quantitative and fundamental style, investing in quasi sovereigns and government debt across a broad universe of instruments and emerging markets.

  • Local currency emerging market debt

    Merian Local Currency Emerging Market Debt Fund

    The strategy is characterised by an active management style that is dynamic and flexible, separating sources of sovereign return. The three key components of risk and return are external debt, local rates and currency. The strategy combines a quantitative and fundamental style, investing in quasi sovereigns and government debt across a broad universe of instruments and emerging markets.

Philosophy

Within our credit portfolios, we combine rigorous bottom-up research of securities with a deep understanding of the macroeconomic environment, in order to unearth the investment opportunities with the most favourable risk-reward characteristics. This philosophy enables us to generate returns by gaining exposure to investment themes across different parts of the capital structure and credit curve, in global corporate debt markets. A strong focus on liquidity and risk-management is core to our approach, whereby we seek to deliver yield at the same time as protecting client capital.

Investment team

The highly experienced credit team consists of portfolio managers Lloyd Harris and Deepa Abraham, and dedicated analysts Simon Prior and Przemyslaw Pietraszek.

Capabilities
  • UK investment-grade corporate bonds/credit

    Merian Investment Grade Corporate Bond Fund

    The strategy aims to provide investors with a meaningful level of income, through investment in companies founded on lasting financial strength. The strategy selects diverse sources of return from the large investment universe of investment grade corporate debt of issuers based in the United States, Europe and Asia.

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