Strategy
What is a long short
credit strategy?
A long short credit strategy is a fixed income strategy that aims to maximize total return to investors through income and capital appreciation by investing primarily in corporate bonds, while mitigating capital loss through shorting and other hedging strategies.
Why invest in our long short credit
strategy?
- Diversification. Adding a unique long short credit strategy, which is generally uncorrelated and has zero-to-low beta to traditional assets, can improve the overall diversification of a portfolio.
- Performance enhancement. Participate in the credit market with a strategy designed to mitigate risks commonly associated with income investing, such as interest rate, liquidity, currency and credit risk, hence achieving better risk-adjusted returns.
- Consistent income. Investing in a long short credit strategy can offer steady investment income with low volatility.
How does our long short credit
strategy work?
The strategy invests in three pillars and applies an option hedging overlay aimed at mitigating risk.
We then apply a hedge strategy to mitigate risks commonly
associated with income investing:
Rate Risk
bond price decreases
when interest rates rise
Other Risks
e.g: liquidity, currency risks
Credit Risk
Distressed issuers,
probability of default
Who is our long short credit strategy
suitable for?
Our long short credit strategy may be suitable for investors who:
- Seek exposure to high-yield and income securities of corporate issuers primarily in developed markets.
- Want to complement long-only income and equity investments, while mitigating downside risk.
- Desire an alternative strategy in their fixed income portfolio, and have a long time horizon.
What long short credit investment products
does Picton Mahoney offer?
Alternative Investment Solutions are available as mutual funds, liquid alternative funds and hedge funds. Our suite of Fortified Mutual Funds, Fortified Alternative Funds and Authentic Hedge® Funds give investors more choice and ease of access to alternative strategies, adding an alternative source of returns to fortify a portfolio. Our goal, for over 18 years, through different market cycles and investing environments, has been to improve the quality of returns by offering alternative investment solutions.
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This information has been provided as a general source of information, is subject to change without notification and should not be construed as investment advice. This material should not be relied upon for any investment decision and is not a recommendation, solicitation or offering of any security in any jurisdiction. The information contained in this material has been obtained from sources believed reliable, however, the accuracy and/or completeness of the information is not guaranteed by Picton Mahoney Asset Management (PMAM), nor does PMAM assume any responsibility or liability whatsoever. All investments involve risk and may lose value. This information is not intended to provide financial, investment, tax, legal or accounting advice specific to any person, and should not be relied upon in that regard. Tax, investment and all other decisions should be made, as appropriate, only with guidance from a qualified professional.
There is no guarantee that a hedging strategy will be effective or achieve its intended effect. The use of derivatives or short selling carries several risks which may restrict a strategy in realizing its profits, limiting its losses, or, which cause a strategy to realize or magnify losses. There may be additional costs and expenses associated with the use of derivatives and short selling in a hedging strategy.
The offering of units of the Picton Mahoney Authentic Hedge® funds are made pursuant to an Offering Memorandum only to those investors in jurisdictions of Canada who meet certain eligibility or minimum purchase requirements. Prospective investors should consult with their investment advisor to determine suitability of investment. Please see the Fund’s Confidential Offering Memorandum for more information, including investment objectives and strategies, risk factors and investor eligibility.
Commissions, trailing commissions, management fees, performance fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. Alternative mutual funds can only be purchased through a registered dealer and are available only in those jurisdictions where they may be lawfully offered for sale.