The strategy offers the potential to generate competitive total return from both income and capital appreciation by tactically managing exposure to floating rate bank loans and high yield bonds (0%-100% in either asset class). Interest rate risk is limited by keeping duration at three years or less. The flexible credit team employs a relative value approach centered on fundamental analysis, loss avoidance, diversification, and active management.
Step 1: Top-Down Sector and Industry Analysis
- Relative value determines the allocation between bank loans and high yield bonds
- Indusry bias and analysis such as competition, industry cycle, secular trends, and relative value determine industry positioning
- Formal monthly Newfleet multi-sector meetings strengthen decision-making
Step 2: Bottom-Up Security Selection
- Perform in-depth fundamental credit analyses including business drivers, financial analysis, management experience, capital markets access, liquidity, and enterprise value
- Look for companies with a competative advantage, sustainable capital structure, stable cash flow, and a bias to deleverage
- Coverge of both loans and high yield allows for determination of best risk-adjusted relative value within the capital structure
Step 3: Portfolio Construction, Opportunistic Trading, and Oversight
- Construct diversified portfolios across credit ratings, capital structure, issuers, and industries
- Dedicated traders actively take advantage of mispricings, market dislocations, and special situations
- Constant evaluation using technology, proprietary credit monitoring tools and research database provides early detection of potentially deteriorating credits or profitable trading opportunities
Documents
Portfolio Managers
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David Albrycht, CFA
President and Chief Investment Officer33 years of industry experience
David Albrycht, CFA, is president and chief investment officer of Newfleet Asset Management. Mr. Albrycht is the senior portfolio manager of several multi-sector fixed income strategies, some dating back to the early 1990s. In his role as CIO, Mr. Albrycht drives top-down strategy for Newfleet’s investment platform, which includes multi-sector and dedicated sector strategies for high yield, bank loans, flexible credit, and distressed debt. In addition to managing mutual funds and variable investment options in these strategies, Mr. Albrycht is co-manager of three closed-end funds, Virtus Total Return Fund Inc. (NYSE: ZF), Virtus Global Multi-Sector Income Fund (NYSE: VGI), and Virtus Global Dividend & Income Fund Inc. (NYSE: ZTR). He also is co-manager of three exchange traded funds, AdvisorShares Newfleet Multi-Sector Income ETF (NYSE: MINC), Virtus Newfleet Multi-Sector Bond ETF (NYSE: NFLT), and Virtus Newfleet Dynamic Credit ETF (NYSE: BLHY), and two offshore funds, the Virtus GF Multi-Sector Short Duration Bond Fund and the Virtus GF Multi-Sector Income Fund. Additionally, Mr. Albrycht is responsible for the structuring and management of Newfleet’s CLO platform.
Prior to joining Newfleet in 2011, Mr. Albrycht was executive managing director and senior portfolio manager with Goodwin Capital Advisers, a former investment management subsidiary of Newfleet’s parent, Virtus Investment Partners. Prior to that role, Mr. Albrycht was director of credit research at Goodwin’s predecessor, Phoenix Investment Counsel (PIC). In addition, he managed the Phoenix MISTIC CDO, a $1 billion multi-sector collateralized debt obligation, for which he was responsible for credit analysis and deal structure. He joined the PIC multi-sector fixed income team in 1985 as a credit analyst and has managed fixed income portfolios since 1991.
Mr. Albrycht earned a B.A., cum laude, from Central Connecticut State University and an M.B.A., with honors, from the University of Connecticut. He is a CFA® (Chartered Financial Analyst®) charterholder. He began his career in the investment industry in 1985.
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Francesco Ossino
Senior Managing Director and Senior Portfolio Manager22 years of industry experience
Francesco Ossino
Senior Managing Director and Senior Portfolio Manager22 years of industry experience
Frank Ossino is a senior managing director, senior portfolio manager, and sector head of the bank loan asset class at Newfleet Asset Management. Mr. Ossino serves as a portfolio manager of Newfleet’s Floating Rate Bank Loan and Flexible Credit strategies in both separately managed and pooled vehicles as well as mutual funds through a number of subadvisory relationships. Additionally, Mr. Ossino is responsible for the structuring and management of Newfleet’s CLO platform.
Prior to joining Virtus in 2012, Mr. Ossino was a portfolio manager at Hartford Investment Management Company (2004-2011) and Hartford Funds subadviser Wellington Management (2012), where he managed mutual funds focused on bank loans and a commingled bank loan portfolio for institutional investors. Previously, he held a variety of credit analyst and portfolio management positions at CIGNA (2002-2004), HVB Bank (2000-2002), and FleetBoston Financial (1996-2000).
Mr. Ossino earned his M.S. in international economics and finance from Brandeis University and Luigi Bocconi University in Milan, Italy and a B.S. in economics, cum laude, from Brandeis University. He began his career in the investment industry in 1996.
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Jonathan Stanley, CFA
Managing Director and Portfolio Manager21 years of industry experience
Jonathan Stanley, CFA
Managing Director and Portfolio Manager21 years of industry experience
Jonathan Stanley is a managing director, portfolio manager, and sector head of high yield credit at Newfleet
Asset Management. Mr. Stanley is co-portfolio manager of the Newfleet High Yield and Flexible Credit strategies in both separately managed and pooled vehicles, as well as mutual funds, through a number of subadvisory relationships. Mr. Stanley also serves as co-portfolio manager of three multi-sector, actively managed exchange traded funds. In addition, he has responsibility for the structuring and management of Newfleet’s CLO platform.
Prior to joining Newfleet in 2011, Mr. Stanley was on the fixed income team at Goodwin Capital Advisers and its predecessor, Phoenix Investment Counsel, over two separate periods. From 1997 to 2001, he served in several capacities, including as an analyst on the emerging markets team. He left the firm to pursue other opportunities for five years, and rejoined in 2006 as a member of the corporate credit group. He assumed responsibilities for the high yield sector in 2008.
Mr. Stanley’s additional investment experience includes serving as a research analyst at Hollister Investment Management, and as a portfolio manager at FA Asset Management and Global Financial Private Capital.
Mr. Stanley earned a B.S. in accounting from Fairfield University and an M.B.A. from the University of Florida. He is a CFA® (Chartered Financial Analyst®) charterholder. He began his career in the investment industry in 1997.
Important risk considerations
- Credit & Interest: Debt securities are subject to various risks, the most prominent of which are credit and interest rate risk. The issuer of a debt security may fail to make interest and/or principal payments. Values of debt securities may rise or fall in response to changes in interest rates, and this risk may be enhanced with longer-term maturities.
- Bank Loans: Loans may be unsecured or not fully collateralized, may be subject to restrictions on resale and/or trade infrequently on the secondary market. Loans can carry significant credit and call risk, can be difficult to value and have longer settlement times than other investments, which can make loans relatively illiquid at times.
- High Yield-High Risk Fixed Income Securities: There is a greater level of credit risk and price volatility involved with high yield securities than investment grade securities.
- ABS/MBS: Changes in interest rates can cause both extension and prepayment risks for asset- and mortgage-backed securities. These securities are also subject to risks associated with the repayment of underlying collateral.
- Foreign & Emerging Markets: Investing internationally, especially in emerging markets, involves additional risks such as currency, political, accounting, economic, and market risk.