Sparinvest - Value Bonds Strategy

Value Bonds Strategy

Academic research published in 2001 indicated that the corporate bond market was subject to the same size and value factors that are markers for excess returns from the equities market. The implication was that corporate bondholders should be able to achieve higher returns by loaning their money to smaller, undervalued companies.

Sparinvest’s Value Bonds strategy uses this knowledge to provide corporate bond portfolios that are able to deliver better risk-adjusted returns than those which seek their higher yields from the lower end of the credit spectrum.

Sparinvest’s value bond investment objectives are:

To preserve the capital of our investors by building a portfolio of bonds with low default risk and relative immunity to LBO activity.
To provide investors with superior long-term positive returns from value bond investments without exposing them to riskier credits.
To measure our performance against investor expectations rather than indices (we aim for positive returns rather than relative returns).
To remain disciplined towards our value investment philosophy at all times.
To lend money to the business on the basis of its fundamental creditworthiness.

For a more detailed description of Sparinvest’s Value Bonds strategy and the academic evidence supporting it, please click here.

Sparinvest High Yield Value Bonds:

A portfolio of thoroughly researched corporate bonds emphasizing smaller companies and value companies with strong balance sheets and low indebtedness.

Sparinvest Investment Grade Value Bonds:

This fund aims to achieve higher yields than Government bonds through exposure to the Investment Grade segment of the corporate bond market.