GLG Global Debt Total Return

The GLG Global Debt Total Return Strategy provides access to the complex universe of global debt markets through an active strategy managed by an experienced investment team.
  • The investment team is led by Guillermo Osses, who has over 28 years of investment experience. He is supported by a team of experienced co-Portfolio Managers.
  • The strategy seeks to achieve a return in all markets conditions over the investment horizon, with strong risk-adjusted characteristics.
  • Seeks to reduce the draw-down risks associated with both long durations the presence of weak developed market countries, as well as deteriorating EM countries, in the traditional benchmarks.
  • Tactical off-benchmark (Bloomberg Barclays Global Aggregate index) exposure to EM Debt opportunities aims to provide the potential for additional alpha generation and diversification benefits.
  • Active management of duration beta and G10 currency exposure.
  • Fundamental analysis, relative valuation and market positioning considerations are at the core of the investment process which is further enhanced by top-down views.
  • Aims to provide potential for uncorrelated returns versus managers that are, in the team’s opinion, often structurally overinvested in credit or duration (beta) as their main source of value add.

Approach

The team follows a disciplined investment process which seeks to add value by combining deep fundamental research with top down and quantitative screening, complemented by a strong risk management discipline. The process consists of five stages:
  • Global core: After using the composition of the Bloomberg Barclays Global Aggregate universe as a starting point, the team adjusts overall G10 currency exposures, duration, and credit spreads to reflect their macro views over the investment horizon.
  • Top-down analysis: The team considers the potential effects of global developments on the fundamentals and valuations of the opportunity set, and determines return and volatility expectations for the investment universe. Proprietary positioning tools are used to determine the degree of risk concentration across different assets.
  • Implementation of long/short exposures in Emerging Markets debt: The aim is to generate an alternative source of outperformance which is potentially uncorrelated with the typical duration and credit strategies often used by global fixed income managers.
  • Portfolio Construction: The team develops an initial model portfolio that replicates the benchmark’s behaviour. They will then make adjustments to duration, FX exposures, and main credit group exposures within the universe in response to their expectations in terms of returns and volatility of each of the components of the global fixed income universe.
  • Stress testing: Finally, the team assesses the sensitivity of the portfolio to different risk factors in order to ensure that the portfolio is within the tracking error, volatility and drawdown targets.
Approach Long-only
Asset Class Fixed Income
Geographic Focus Global
Benchmark Bloomberg Barclays Global Aggregate

Manager(s)

Guillermo Ossés
Guillermo Ossés
Head of Emerging-Market Debt Strategies, Man GLG
Phil Yuhn
Phil Yuhn
Portfolio Manager, Man GLG
Jose Wynne
Jose Wynne, PhD
Portfolio Manager, Man GLG

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Man offers a comprehensive suite of investment solutions and formats that can be tailored and optimised to meet specific client needs. Our investment solutions offer optionality including: liquidity, control, investment restrictions, investor customisations and transparency.

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Considerations

One should carefully consider the risks associated with investing, whether the strategy suits your investment requirements and whether you have sufficient resources to bear any losses which may result from an investment:

Investment Objective Risk - There is no guarantee that the Strategy will achieve its investment objective.

Market Risk - The Strategy is subject to normal market fluctuations and the risks associated with investing in international securities markets and therefore the value of your investment and the income from it may rise as well as fall and you may not get back the amount originally invested.

Counterparty Risk - The Strategy will be exposed to credit risk on counterparties with which it trades in relation to on-exchange traded instruments such as futures and options and where applicable, ‘over-the- counter’("OTC","non-exchange") transactions. OTC instruments may also be less liquid and are not afforded the same protections that may apply to participants trading instruments on an organised exchange.

Currency Risk - The value of investments designated in another currency may rise and fall due to exchange rate fluctuations. Adverse movements in currency exchange rates may result in a decrease in return and a loss of capital. It may not be possible or practicable to successfully hedge against the currency risk exposure in all circumstances.

Liquidity Risk - The Strategy may make investments or hold trading positions in markets that are volatile and which may become illiquid. Timely and cost efficient sale of trading positions can be impaired by decreased trading volume and/or increased price volatility..

Concentration Risk - The Strategy invests in a limited number of investments may be held which can increase the volatility of performance.

Financial Derivatives - The Strategy will invest financial derivative instruments ("FDI") (instruments whose prices are dependent on one or more underlying asset) to achieve its investment objective. The use of FDI involves additional risks such as high sensitivity to price movements of the asset on which it is based. The extensive use of FDI may significantly multiply the gains or losses.

Leverage - The Strategy's use of FDI may result in increased leverage which may lead to significant losses.

Emerging Markets - The Strategy may invest a significant proportion of its assets in securities with exposure to emerging markets which involve additional risks relating to matters such as the illiquidity of securities and the potentially volatile nature of markets not typically associated with investing in other more established economies or markets.

Non-Investment Grade Securities - The Strategy may invest a significant proportion of its assets in non-investment grade securities (such as “high yield” securities) are considered higher risk investments that may cause income and principal losses for the Strategy. They are instruments which credit agencies have given a rating which indicates a higher risk of default. The market values for high yield bonds and other instruments tend to be volatile and they are less liquid than investment grade securities.