The strategy offers the potential for attractive total return and income by investing in higher quality, non-investment grade bank loans. Using extensive credit and company analysis and monitoring, the portfolio managers look for those securities with strong income potential while maintaining an emphasis on managing risk.
Step 1: Macroeconomic Analysis
- Identify attractive industries/theme/risk appetite
- Industry Analysis – (e.g., state of growth; cyclicality; competitive factors)
- Industry Themes – (e.g., new technology/product; secular trends)
- Risk appetite driven credit cycle phase; technical/liquidity
Step 2: Fundamental Analysis
- Perform extensive credit and company analysis
- Fundamental analysis includes assessment of: credit risk; company management; issue structure; technical market conditions; focus on valuations
- Identify loan characteristics/structures
Step 3: Portfolio Construction
- Over/underweight industries relative to benchmark based on relative value analysis
- Emphasize broad diversification to limit exposure to an industry or issuer
- Conduct credit monitoring and portfolio review
Documents
Portfolio Managers
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David Albrycht, CFA
President and Chief Investment OfficerDavid 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, and flexible credit. In addition to managing mutual funds and variable investment options in these strategies, Mr. Albrycht is co-manager of two closed-end funds, Virtus Total Return Fund Inc. (NYSE: ZTR) and Virtus Global Multi-Sector Income Fund (NYSE: VGI). 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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Kyle Jennings, CFA
Senior Managing Director and Head of Credit ResearchIndustry start date: 1992
Kyle Jennings, CFA
Senior Managing Director and Head of Credit ResearchKyle Jennings is a senior managing director and the head of credit research at Newfleet Asset Management. Mr. Jennings is also co-portfolio manager of Newfleet’s Floating Rate Bank Loan, High Yield, and Global Multi-Sector Income strategies through a number of subadvisory relationships. Additionally, Mr. Jennings is responsible for the structuring and management of Newfleet’s CLO platform.
Mr. Jennings is a member of Newfleet’s corporate credit research team and currently covers the gaming, healthcare, and pharmaceuticals industries. He is also a member of the team that formulates the leveraged finance strategy for the multi-sector fixed income strategies.
Prior to joining Newfleet in 2011, Mr. Jennings was on the fixed income team at Goodwin Capital Advisers, joining the predecessor, Phoenix Investment Counsel, in 1998. Before that, he was a credit research analyst in the banking industry for Shawmut Bank, Ironwood Capital, and Citizens Bank.
Mr. Jennings earned a B.S. in finance from the University of Connecticut. He is a CFA® (Chartered Financial Analyst®) charterholder. He began his career in the investment industry in 1992. -
Francesco Ossino
Senior Managing Director, Senior Portfolio Manager, and Bank Loan Sector HeadIndustry start date: 1996
Francesco Ossino
Senior Managing Director, Senior Portfolio Manager, and Bank Loan Sector HeadFrank 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 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.
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.
- Leverage: When a fund leverages its portfolio, the value of its shares may be more volatile and all other risks may be compounded.
- Liquidity: Certain securities may be difficult to sell at a time and price beneficial to the fund.