Opportunistic Structured Credit
Seeks to deliver high current yield and total returns with limited duration
The Opportunistic Structured Credit strategy invests across the breadth of undervalued opportunities generated by Guggenheim’s asset backed securities (“ABS”), residential mortgage backed securities (“RMBS”), and commercial mortgage backed securities (“CMBS”) platform.
Strong Track Record*
The strategy has delivered net returns of 16.5% per annum since inception in 2008, significantly outperforming its benchmark across different market environments. Risk management is embedded in every step of our process and the strategy has only experienced a negative quarterly return in one quarter since its inception in 2008.
Historically, investors have been offered regular distributions which they can take in cash or reinvest. Ten distributions have been offered to date, equaling approximately 50% of the net realized gains for each applicable time period.
Extensive Research Capabilities
Our analysts are organized by sector and perform deep due diligence on underfollowed deals with complex structures. Our rigorous research process allows us to unlock value without taking undue credit and interest rate risk.
We employ opportunistic positioning at the sector and security level with a strong emphasis on relative value. The strategy’s allocations across ABS, CMBS and RMBS are driven by Guggenheim’s extensive macroeconomic and bottom-up research. The strategy has generated significant monthly cash flow, which mitigates the impact from market volatility and enables sector allocation without selling current holdings.
The strategy has delivered attractive returns with low correlation to other asset classes and can provide excellent diversification benefits in an overall portfolio. With its track record of outperformance and high risk-adjusted returns, we believe the Opportunistic Structured Credit strategy can be a compelling solution in many economic or market environments.
Anne B. Walsh, JD, CFA
Assistant CIO Fixed Income
Steven Brown, CFA
*As of 09.30.2015. The strategy’s benchmark is the Bank of America Merrill Lynch 3 month LIBOR Constant Maturity Index. Net returns are calculated by reducing gross returns with a model fee that includes 1) the greater of a) the highest management fee charged to an account in the Composite or b) the highest tier of the current management fee schedule, and 2) estimated performance fees where applicable. For the period 2008, the net returns presented reflect actual fees on a cash basis, not a model fee.
Risk Considerations: Past performance is not a guarantee of future results. Investing involves risk, including the possible loss of principal. There is no guarantee that any investment strategy will achieve its investment objectives or is suitable for all investors. Diversification does not ensure profit nor protect against loss. Every asset class is subject to various risks that affect their performance in different market cycles. Fixed income investments are subject to certain risks including market, interest-rate, issuer, credit, and inflation risk. Equity investments are subject to market risk or the risk of loss due to adverse company and industry news, or general economic decline. Alternative investments are subject to market risk, currency risk, foreign investment risks, liquidity risks, higher fees and expenses, regulatory restrictions, and volatility due to speculative trading and use of leverage.