Floating Rate Bank Loan


Featured Strategies:

Floating Rate Bank Loan Strategy

The strategy offers the potential for attractive total return and income by investing in higher quality, non-investment grade bank loans. Using extensive credit and company analysis and monitoring, the portfolio managers look for those securities with strong income potential while maintaining an emphasis on managing risk.

Investment Process

Step 1 - Macroeconomic Analysis

  • Identify attractive industries/theme/risk appetite
  • Industry Analysis – (i.e. state of growth; cyclicality; competitive factors)
  • Industry Themes – (i.e. new technology/product; secular trends)
  • Risk appetite driven credit cycle phase; technical/liquidity

Step 2 - Fundamental Analysis

  • Perform extensive credit and company analysis
  • Fundamental analysis includes assessment of: credit risk; company management; issue structure; technical market conditions; focus on valuations
  • Identify loan characteristics/structures

Step 3 - Portfolio Construction

  • Over/under-weight industries relative to benchmark based on relative value analysis
  • Emphasize broad diversification to limit exposure to an industry or issuer
  • Conduct credit monitoring and portfolio review

Strategy Risk

Credit & Interest: Debt securities are subject to various risks, the most prominent of which are credit and interest rate risk. The issuer of a debt
security may fail to make interest and/or principal payments. Values of debt securities may rise or fall in response to changes in interest rates, and this
risk may be enhanced with longer-term maturities.

Bank Loans: Loans may be unsecured or not fully collateralized, may be subject to restrictions on resale and/or trade infrequently on the secondary
market. Loans can carry significant credit and call risk, can be difficult to value and have longer settlement times than other investments, which can
make loans relatively illiquid at times.

High Yield-High Risk Fixed Income Securities: There is a greater level of credit risk and price volatility involved with high yield securities than
investment grade securities.

Leverage: When a fund leverages its portfolio, the value of its shares may be more volatile and all other risks may be compounded.

Liquidity: Certain securities may be difficult to sell at a time and price beneficial to the fund.

Portfolio Team

David L. Albrycht, CFA 

Industry Start Date: 1985

Kyle A. Jennings, CFA 

Industry Start Date: 1992

Francesco Ossino 

Industry Start Date: 1996

Featured Documents