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In today’s constantly shifting markets, investors increasingly need flexible credit strategies that can adapt quickly to an environment of shorter and more frequent market dislocations. But many lack the tools to find the right balance between maintaining full exposure to each credit sector and reallocating quickly as markets change.
GMO Multi-Asset Credit addresses this challenge by building a diversified, global credit portfolio that can pivot dynamically based on changing economic conditions.
Allocating across the Credit Spectrum
We use a robust research framework that combines top-down and bottom-up fundamental and quantitative analysis to evaluate credit risk premia and determine optimal portfolio allocations. Our nimble process enables us to take advantage of often-fleeting relative value opportunities across fixed income markets.
The Multi-Asset Credit Strategy allocates to underlying GMO credit alpha engines run by dedicated, expert teams.
- Systematic U.S. High Yield: quantitative, factor-based investment approach exploits inefficiencies in the corporate high yield sector
- Systematic U.S. Investment Grade: bottom-up, factor-based process, leveraging deep GMO quantitative investment tools adapted to the corporate bond sector
- Securitized Credit: unconstrained securitized portfolio with low historical beta to the market and capital preservation ability during drawdown periods
- Emerging Markets Debt: unconventional, bottom-up approach focused on “arbitrage-like” instrument selection and minimizing default risk
- Other Credit Markets: positions in other credits when they screen attractively, including leveraged loans, Agency MBS, EM local debt, and derivatives markets for credit (U.S., Europe, indexes, tranches, options), duration management (Treasury futures, interest rate swaps), and foreign exchange
ALPHA DIVERSIFICATION
Low to negative correlation between alpha engines
| Emerging Country Debt | 1.0 | 0.3 | -0.1 | 0.6 |
| Opportunistic Income | 0.3 | 1.0 | -0.1 | -0.3 |
| High Yield | -0.1 | -0.1 | 1.0 | 0.0 |
| Systematic IG Credit | 0.6 | -0.3 | 0.0 | 1.0 |
Data from inception to 6/30/25. Net of fees alpha vs respective strategy benchmarks: GMO Emerging Country Debt vs JPM EMBI Global Diversified +; GMO Opportunistic Income vs Bloomberg US Securitized; GMO High Yield vs Markit iBoxx USD Liquid High Yield; GMO Systematic Investment Grade Credit vs. Bloomberg US Corporate.
High-Conviction, Value-Driven Approach
Our intense focus on relative value results in a differentiated, total-return, benchmark-agnostic style. GMO has a long history of seeking the highest risk-adjusted return opportunities – even if it means straying far from a conventional benchmark.
We balance risk and return by focusing on preserving capital on the downside and avoiding "chasing yield" during periods of market froth.
Watch the full webcast: Maximizing Alpha Potential Through the Credit Cycle
Diversification beyond the Usual U.S.-Centric Credit Exposures
GMO was one of the first managers to launch an emerging markets debt strategy more than 30 years ago, and our delivered long-term net alpha has been high relative to the benchmark and to other managers.
Our Multi-Asset Credit Strategy accesses GMO’s long-running, award-winning Emerging Country Debt capability.
The Client Fit
The GMO Multi-Asset Credit Strategy can add value in a variety of ways for both institutional investors and financial intermediaries, such as RIAs and family offices, seeking to enhance fixed-income returns, manage downside risk, and diversify liquid fixed-income portfolios into inefficient asset classes.
- A stand-alone allocation to gain exposure to core credit markets
- As part of a multi-manager allocation to credit markets
- Alongside broader fixed income mandates that invest in a spectrum of credit markets
GMO Team
The Multi-Asset Credit platform brings together core GMO fixed income investment teams, including Emerging Country Debt, Structured Credit, High Yield, and Systematic Credit, as well as dedicated trading and research teams, each averaging over 15 years of industry experience.
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