Overview
GMO’s Multi-Asset Credit Strategy launched on May 21, 2025, and builds on the strengths of GMO’s longstanding core credit capabilities, benefits from GMO’s investment style diversification, and enables a more agile and comprehensive approach to investing in credit. Anchored by our valuation-driven philosophy, the GMO Multi-Asset Credit Strategy dynamically allocates across fixed income markets including emerging debt, structured products, high yield and investment grade credit, loans, and mortgages.
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Why Dynamic Allocation in Credit Matters
- Allocators increasingly seek flexible credit strategies that can adapt quickly to an environment of shorter and more frequent market dislocations.
- Many investors lack the infrastructure to underwrite each credit sector or react quickly to market changes.
- GMO’s nimbleness and focus on margin of safety allow us to capitalize on short-lived dislocations.
Distinctive Attributes
- GMO’s investment philosophy emphasizes agility, high conviction, and an unconventional value-driven approach to investing in core credit asset classes.
- GMO’s 30-year track record in emerging debt investing adds diversification beyond typical U.S.-centric credit risks.
- A top-down, bottom-up allocation framework integrates proprietary models, with both quantitative and fundamental analysis to guide portfolio construction.
Multi-Asset Credit’s Core Alpha Engines
As of 5/30/2025
Alpha Diversification
Low to negative correlation between alpha engines
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GMO Emerging Country Debt | 1.0 | 0.3 | -0.1 | 0.6 |
GMO Opportunistic Income | 0.3 | 1.0 | -0.1 | -0.3 |
GMO High Yield | -0.1 | -0.1 | 1.0 | 0.1 |
GMO Systematic IG Credit | 0.6 | -0.3 | 0.1 | 1.0 |
Data from inception to 5/30/2025
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.
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