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GAM Star Credit Opportunities

Elite Rated by FundCalibre

The fund seeks to produce a high level of income by investing predominantly in investment grade (high quality) bonds. It is a ‘safety first’ fund with very low turnover, as the managers’ process looks for bonds they can buy and hold for 10 years. Very little of what they own yields less than 6% at the initial purchase point and this gives them far less interest rate sensitivity than many of their peers, which is particularly valuable in the current environment.

Company Description

Founded in 1983, Global Asset Management (GAM) operates in more than 10 countries worldwide, with offices in Europe, North America and Asia. Atlanticomnium has managed assets for GAM since 1985 and is currently the investment adviser for multiple GAM bond funds. Jeremy Smouha, CEO of Atlanticomnium UK (Ltd), was a founding member of GAM.

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Fund Manager

This fund is one of a trio run by Anthony Smouha and Gregoire Mivelaz, who have more than 50 years’ experience in investment between them. They have managed this fund since its launch in July 2011. They share a passion for what they do, clearly evident when talking to them, and a willingness to always keep learning.

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Our mantra is yield, value and capital preservation. Within this context, we look for the simple themes and credits. This means asking the right questions.

Anthony Smouha - Fund Manager

The Investment Process

The managers prefer investment grade bonds because they believe the chances of these companies defaulting on their loans is much lower than high yield companies, especially over the longer term. In addition to credit analysis,Anthony and Gregoire look at companies with an equity analyst mindset, making sure they understand the sustainabilty of the business model and management capability too. The fund typically has between 130 and 180 holdings. 70% will be core, providing some income and capital preservation. The remaining 30% will provide high income and diversification.

Risk

Risk control starts with the managers’ goal of finding long-term holdings in sound companies with low default risk. If there is a fundamental change they will assess and if necessary cut the position. They have their own risk analysis, which is run daily, as well as input from the GAM risk team.

Our Opinion

The team benefits from an open and communicative culture that fosters frequent challenging of ideas. Their process for determining a company’s credit worthiness is stringent. This is a very successful fund run by a team who have many years of experience, yet remain passionate about what they do.

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