Senior Floating Rate Loan Fund

Investment Objective
To seek to provide a high level of current income and such preservation of capital as is consistent with investment in a diversified portfolio of senior loans.

Primary Investments
The Fund seeks to accomplish its investment objective through investment primarily in a diversified portfolio of predominantly US Senior Loans. The Fund may also invest in interest rate swaps, total return swaps, credit default swaps, currency futures, forwards or options, warrants and other equity interests and derivatives.

Style
Credit, Floating Rate

Investment Philosophy
Loomis Sayles’ philosophy is based on the experience that bond markets do not properly assess credit risk and tend to overact to corporate events. Through intensive bottom up research Loomis Sayles believe they can identify senior loans that have attractive risk/return prospects.

Process
The process analyses the fundamentals of each senior loan.

  1. Fundamental Analysis of the Borrower
    Enterprise value vs. loan value, Default risk, Credit cushions, Borrower’s cash flow generating ability and Borrower’s credit standing and management
  2. Structural Features
    Underlying collateral, Appropriate loan covenants, Rate of interest on the loan, Rating/quality
     
The portfolio is designed with the following characteristics:
  • A higher quality bias than the full bank loan index for most of the credit cycle
  • Portfolio discipline on specific and industry risks
  • Intense focus on individual credit quality
The portfolio's goals are:
  • Performance close to the full bank loan index in strong credit environments
  • Beating the full bank loan index when defaults increase and over the credit cycle
  • Delivering a transparent asset allocation solution
Portfolio Fit
Will complement a traditional fixed income portfolio or alternatives strategy by providing diversification benefits and protection during periods of rising interest rates or inflation.

Reporting Benchmark
3 Month AUD Bank Bill

Currency
Generally between 95% and 105% of the Fund’s assets are hedged into Australian dollars.

Vehicle
Fully distributing wholesale Australian Managed Investment Scheme. The Fund has daily valuations and is open to applications and redemptions on the 1st and 15th day of each month (or the first business day after those days). Applications and redemptions are subject to the timelines disclosed in the Information Memorandum. Equity Trustees Limited acts as Responsible Entity.

Investment Manager
Loomis, Sayles & Company, L.P.

Portfolio Team
Two portfolio managers supported by the broader Loomis Sayles credit research and risk management teams

APIR Code
IAM0006AU