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Specialist in Asia Pacific, Japan, China, India and South East Asia and Global Emerging Market equities.

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Stewart Investors manage investment portfolios on behalf of our clients over the long term and have held shares in some companies for over 20 years. They launched their first investment strategy in 1988.

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Leader in systematic equities across market cap weighted indices, smart beta and active quantitative strategies

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High Yield Fixed Income

Since 1989, we have managed funds under the Colonial First State brand. Fund names are changing to reflect our new name, First Sentier Investors.

High Yield Fixed income can distribute stable income and total return while dampening volatility relative to equities and adding yield relative to core bonds.

Active management and a focus on downside risk can help produce stable long-term out performance. 

We aim to generate consistent alpha in the top quartile relative to peers which over long periods leads to attractive peer comparisons.

Our Process

Our Strategy strives to maximize risk adjusted returns, and seeks superior absolute returns over a market cycle, with lower volatility than the broad market. Our approach involves maximizing the default adjusted yield and spread of a diversified portfolio, implementing a fundamental, value-driven investment style.

First, and foremost, our approach is about risk control. Default risk is the dominant risk factor, and all portfolio investments meet stringent, and quantifiable minimum “margin of safety” requirements.

Secondarily, we strive never to buy credit risk at the wrong price. An optimal, risk adjusted, portfolio construction combines dynamic fundamental, bottom-up selection, with continuous top-down portfolio risk management.

 

While our investment process is rigorous in implementation, it is conceptually simple to summarize

Matt Philo

Co-Head of High Yield strategies

Investment process summary

  • Minimum yield screen: with "positive event potential" exceptions

  • Minimum margin-of safety requirements; quantified and stringently applied

  • Qualitative fundamental corporate assessments to further safeguard against default risk

  • Default adjusted methodology, focused on the spread premium necessary to overcompensate to estimated default risk

  • Catalysts for total return, expected to result in total returns above a coupon based yiel

  • Portfolio construction, combines bottom-up credit selection with top-down portfolio risk management

  • Credit risk control: managed by the dynamic, continuous implementation of the disciplined bottom-up investment process (as described above). Primary credit risks include: default, Negative Event and ESG risks.

  • Risk monitoring and review: includes daily portfolio reporting and analysis

Case study

Responsible Investment

Our corporate RI strategy is based upon three strategic pillars of quality, stewardship and engagement.

We partner with our clients to provide solutions that maximise the probability that they will achieve their investment objectives. We assess our client needs based on three key criteria: risk tolerance, investment horizon and return ambition level. We utilise third party monitoring services for our direct holdings.

Learn more about the High Yield Fixed Income team's approach to Responsible Investment

Matt Philo

Senior Portfolio Manager, Co-Head of High Yield

Jason Epstein

Senior Portfolio Manager, Co-Head of High Yield

Linda Grillo

Head High Yield Trader

Jonathan Mann

SENIOR ANALYST

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