Credit Suisse said that the new mutual fund will invest in a diversified portfolio consisting primarily of floating rate bank loans to non-investment grade companies and seek to outperform the Credit Suisse Leveraged Loan Index.
The bank said the fund, which was previously focused on US high yield investments, may also allocate a smaller portion of its portfolio to other debt securities such as high yield bonds.
The fund will be managed by the Asset Management’s Credit Investments Group (CIG), which has $16.2b in assets under management.
The fund will rely upon CIG’s research-driven investment philosophy consisting of bottom-up, fundamental analysis of corporate capital structures, with a particular focus on floating rate bank loans.
Credit Suisse head of the Credit Investments Group John Popp said floating rate bank loans have historically provided attractive diversification benefits to fixed income portfolios. They can mitigate rising interest rate risk and provide a hedge against inflation.
"Considering the current global interest rate environment, we believe that now is an opportune time to invest in the asset class and we are excited to offer our management expertise through an open end fund," Popp said.
