In a climate in which defined benefit (DB) plans are de-risking, we would typically expect a rotation into fixed income and away other parts of the market, such as equities. However, when DB plans re-allocate towards traditional fixed income asset classes, they are often faced with lower return expectations, high levels of interest rate sensitivity and a bias towards domestic assets.
An allocation to a multi-asset credit strategy may help. Multi-asset credit takes an unconstrained, benchmark-agnostic, global approach to investing across the corporate credit spectrum, including investment grade, high yield, loans and emerging market corporate debt. As we illustrate below, the result can be more favourable risk-adjusted returns compared with the average DB scheme allocation.