Morgan Stanley Investment Management has announced the launch of a global credit fund that will focus on high quality corporate debt.
The Global Premier Credit fund aims to invest in firms with low capital intensity and strong balance sheets. Defensive names included in the portfolio should also have dominant franchises or leading industry positions.
'With global sovereign debt now under intense scrutiny from investors, we believe there is scope for a product with the potential to provide investors with modest relative returns over the business cycle while protecting them from market pressures and extreme downside moves,' added Christian Roth, head of global credit at MSIM.
Taking a quantitative approach that will be managed using research from the MSIM global fixed income team, the fund has been launched at a time when some managers are warning of a credit bubble in lower quality corporate debt.
'The Global Premier Credit Fund aims to be an effective strategy to help investors wanting to diversify from government debt, by seeking higher yields through capturing the credit premium of the highest quality credits with limited volatility and default risk,' said Richard Ford, head of European credit at MSIM.
The fund is understood to be made available in Europe and is currently waiting to be registered for sale in Germany.