The Ares Global Credit Income Fund has capped its first year of availability to Australian investors with 12.13% returns net of fees and an initial ‘Recommended’ rating from research provider Zenith Investment Partners.
The fund is the first managed by Ares Australia Management, the strategic joint venture between Ares Management Corporation and the Australian-based Fidante Partners.
The fund aims to provide stable monthly income with a focus on downside protection across market cycles by investing in a diversified portfolio of carefully selected corporate and structured credit assets, including U.S. and European corporate bonds, bank loans and alternative credit markets.
It seeks to avoid riskier asset classes, such as equities, and to minimise exposure to the more stressed segments of the credit market. In its first year to 3 May 2021 the Fund returned 12.13% net of fees with total income for the period reaching 10.59%.
Head of Ares Australia Management Teiki Benveniste said: “This rating underscores our belief that the ‘sweet spot of credit’, characterised by high-levels of current income and low interest rate duration risk, can offer a solution to Australian investors in search of higher income and diversification”.
Also read: Interview with Teiki Benveniste: Head of Ares Australia Management
According to a statement by Ares, Zenith commenced coverage with a Recommended rating as a result of the Ares Global Credit Income Fund’s high-quality and well-resourced investment team, structured investment approach, and demonstrated ability to identify relative value opportunities across credit asset classes allowing the Fund to outperform through a broad range of credit markets.
Samantha Miller, Portfolio Manager and Head of U.S. Liquid Credit Research in the Ares Credit Group, said the fund’s strategy of investing in high-quality credit instruments was geared toward capital preservation through fundamental credit selection and a flexible approach to capitalise on the most attractive relative value opportunities.
“We believe that this approach offers greater opportunities for current income and yield versus traditional fixed income and passive strategies, while reducing volatility and default risk through downside protection offered by senior, and often secured, positions in corporate bonds, loans and asset backed securities.”
