Benchmark driven credit

LGIM provides a comprehensive range of regional and global benchmark driven credit solutions:

We leverage our regional expertise and asset allocation capabilities to deliver truly global credit strategies for our clients.

A global portfolio can be built by simply combining regional allocations or portfolios together. However, we believe that global credit portfolios have additional opportunities to add value by considering cross-market relative value differences on a tactical as well as longer term strategic basis.

LGIM has three global strategies in active investment grade fixed income:

  • Global Credit managed against a sterling benchmark (Core Plus)
  • Global Credit managed against a global benchmark
  • Global Credit managed against an absolute return benchmark

Sterling credit is an important asset for UK institutional investors, offering access to a wide range of global issuers in a domestic currency.

LGIM is one of the UK’s largest holders of sterling corporate bonds. This size and scale not only gives us superior access to new issues but also means there are significant crossing opportunities for our clients.

LGIM has three principal strategies in sterling investment grade fixed income:

  • UK Corporate Bond All Stocks
  • UK Corporate Bond Long Dated
  • Collateralised and Corporates

We believe that the euro credit market offers a diversified range of sectors, issuers, countries and bond structures.

New borrowers within European markets have taken advantage of the single currency creating new investment opportunities. At the same time, the way investors look at risk is increasingly linked to country exposure and sovereign credit.

LGIM has four principal strategies in European investment grade fixed income:

  • Euro Corporate All Stocks
  • Euro Corporate Long Dated
  • Euro Corporate Non – Financial
  • Euro Corporate Higher Alpha

The US investment grade fixed income market is the largest and deepest credit market in the world. As such, an allocation to US credit can provide a liquid way to access the credit market premium, while offering diversification benefits for sterling-centric portfolios.

The under-researched and diverse nature of emerging markets means that opportunities can often arise where emerging market sovereigns and companies are underrated compared to developed market peers.

We believe the key to taking advantage of these opportunities is a robust macro-driven investment process, supported by strong credit research. If pursued properly, we see emerging market debt as a source of diversification and performance for fixed income portfolios.

LGIM has a range of blended benchmark-driven emerging market debt strategies investing across sovereign debt and corporate credit globally, including funds hedged to sterling:

  • L&G Emerging Markets Bond Fund
  • L&G Emerging Markets Short Duration Bond Fund

Our Global High Yield team searches the globe for leading high yield credit opportunities. Our novel, macro-thematic approach has proved to be highly successful, supported by fundamental credit research capabilities and a keen awareness of behavioural finance.

Our macro views drive where we find value across the globe. We balance economic risk with an assessment of global valuations to determine the regional allocations. Our high yield portfolios can therefore provide a ‘one-stop’ shop for global exposure.

Since its formation in 2012, the current LGIM team has delivered strong benchmark out performance*, with high risk-adjusted returns. We have achieved this by rotating between global opportunities and understanding how investor emotion drives markets.

*as at 31 December 2016

A consistent macro thematic investment process is employed for all strategies, supported by rigorous fundamental credit research to identify conviction views and manage risks vs benchmarks - reflecting the distinctions and dynamics of local markets.

Taking regional excellence global

LGIM is one of the UK’s largest investors in sterling corporate bonds, running considerable portfolios through both our index-tracking and active businesses.

Within our global credit solutions we leverage our regional expertise and asset allocation capabilities to deliver a truly global strategy for our clients.

In addition to sterling credit we offer a specialist range of regional strategies, including European, US and emerging market credit.

Why LGIM for benchmark-driven credit?

  • All-purpose approach - Our investment process integrates top-down fundamental macro analysis with bottom-up stock selection and is specifically designed to perform under all market conditions, with no in-built style biases
  • Risk management - By effectively managing a wide variety of potential risks, we have successfully negotiated some of the most challenging conditions investors have ever seen, delivering solid performance
  • Strong and experienced global fixed income team - LGIM is one of the UK’s largest institutional asset managers and dedicates significant resources to fixed income with over 90 investment professionals feeding into our active fixed income investment process and together managing in excess of GBP 144 / EUR 165 / CHF 180 billion (as at 30 June 2017).

Past performance is not indicative of future results.

Fixed income strategies

Find out more about our other fixed income strategies.

Cashflow matching credit 

Multi-Strategy Fixed Income