The GAM Star Credit Opportunities funds1 are corporate credit funds that seek to generate steady, strong income for investors. The managers’ approach is driven by the fact that investment grade companies rarely default, so by extension their junior debt rarely defaults. They use their extensive credit analysis experience to select junior or subordinated bonds of quality companies, capturing the higher yields on offer while benefitting from the low credit default rates. The result is a diversified, liquid portfolio which includes investment grade and non-investment grade, fixed and floating, senior and subordinated debt issues and has produced a track record of steady high income. Compared with other higher yielding fixed income strategies that source their yield from the debt of risky companies (e.g. junk bonds) or risky countries (e.g. emerging market debt), it is a compelling alternative.
The three GAM Star Credit Opportunities funds are UCITS vehicles that each invests in bonds of different base currencies – EUR, USD and GBP – which were launched in July 2011. All three funds follow the successful investment strategy which has been managed by independent corporate bond specialist (Atlanticomnium) for over 30 years. Atlanticomnium has been managing assets for GAM since 1985 and are authorised and regulated by FINMA in Switzerland and the FCA in the UK.