With returns on bonds as paltry as ever, mounted revenue traders should rethink their revenue methods. But many such portfolios stay static, with one-dimensional, antiquated approaches nonetheless taking priority.
Within the upcoming webcast, Loans, An All-Climate Asset Class, George Goudelias, Head of Leveraged Finance, Senior Portfolio Supervisor, Seix Funding Advisors; and David Phipps, Senior Leveraged Finance Analysis Analyst, Seix Funding Advisors, will clarify the diversification advantages of senior mortgage methods.
Particularly, the actively managed Virtus Seix Senior Mortgage ETF (NYSEArca: SEIX) seeks to offer traders with a excessive degree of present revenue through first- and second-lien senior floating fee loans. Senior loans are usually used for enterprise recapitalizations, acquisitions, leveraged buyouts, and re-financing.
The ETF is sub-advised by Seix Funding Advisors LLC, which can handle investments for the portfolio. Seix seeks to generate aggressive absolute and relative risk-adjusted returns over the total market cycle by way of a bottom-up centered, top-down conscious course of. Seix employs multi-dimensional approaches based mostly on strict portfolio building methodology, promote disciplines and buying and selling methods with prudent threat administration as a cornerstone.
The inherent dangers related to senior loans are much like the dangers of junk bonds, however have seniority within the occasion of borrower default. If the enterprise is compelled to promote its property in a liquidation state of affairs, the senior mortgage can be paid first. As well as, senior loans are secured by property whereas junk bonds will not be, making them a extra engaging funding choice when developing a mortgage portfolio.
SEIX invests in loans that possess floating coupon charges tied to a benchmark lending fee, and are under funding grade or unrated. The floating fee permits traders to capitalize on any short-term rate of interest changes.
“Leveraged loans supply the potential for greater revenue and decrease correlations to different mounted revenue asset courses, and although they could probably present safety in a rising rate of interest surroundings, they’ve traditionally carried out effectively in intervals of secure rates of interest,” in line with Virtus Funding Companions.
Monetary advisors who’re desirous about studying extra about senior mortgage methods can register for the Thursday, Might 20 webcast right here.
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