Asset-backed securities

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Investing in a portfolio of asset-backed securities (ABS) provides exposure to a global asset class that we believe carry an attractive premium for complexity rather than additional credit risk. Our experienced team invests in a wide range of global asset-backed securities. The security and fundamental quality of the investments offer defensive characteristics and the floating rates of the underlying securities in a rising interest rate environment.

We have three ABS pooled funds – the Global ABS Fund, Libor Plus Fund and the Liquid ABS Fund – which have been designed to meet differing risk/return and liquidity requirements. Our ABS capabilities can also be accessed on a segregated basis.


Targets returns in excess of cash: (3-month Libor) by investing in high-quality asset backed securities.

Strong liquidity management: offering a high degree of liquidity; all funds have a high allocation to short-dated investments.

Diversification and high credit quality: the portfolios are highly diversified, with the majority of investments expected to have a credit rating of A or above (depending on the strategy).

Contractual cash flows: ABS offer structured and secured cash flows, which we believe enables investors to manage their cash flow requirements more effectively.

Bankruptcy and sovereign remote: the investor’s credit risk is related to the underlying collateral and is not related to the financial health of the originating bank or sovereign. 

Insulation from interest rate risk: the floating-rate nature of the investments can mitigate the impact of interest rate rises.

Effective return-seeking component of an LDI strategy: may be used to help generate Libor-based returns for the floating-rate part of a swap or gilt-based strategy hedging.

Please note: with effect from 11 December 2017 a temporary stop has been placed on subscriptions from new shareholders to Insight Libor Plus strategy. A maximum additional subscription of 1 million (GBP, EUR, USD, CHF) per existing shareholder applies at any daily dealing window. Please contact your Insight relationship manager for further information.


ABS Fund snapshot

In addition, we also offer the Secured Finance Fund which seeks to provide access to credit opportunities beyond the traditional investment grade space, without compromising credit quality and with the aim of minimising risk.

Fixed income team in numbers

  • 116 Fixed income investment professionals globally
  • 17years Average experience of fixed income team
  • £124.1bn fixed income assets

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Team statistics as at 30 June 2018. Assets under management (AUM) are represented by the value of cash securities and other economic exposure managed for clients.

Important information

The value of investments and any income from them will fluctuate and is not guaranteed (this may be partly due to exchange rate fluctuations). Investors may not get back the full amount invested. Past performance is not a guide to future performance. Target performance aims are not a guarantee, may not be achieved and a capital loss may occur.

Derivatives may be used to generate returns as well as to reduce costs and/or the overall risk of the portfolio. Using derivatives can involve a higher level of risk. A small movement in the price of an underlying investment may result in a disproportionately large movement in the price of the derivative investment.

Where the portfolio holds over 35% of its net asset value in securities of one governmental issuer, the value of the portfolio may be profoundly affected if one or more of these issuers fails to meet its obligations or suffers a ratings downgrade.

The issuer of a debt security may not pay income or repay capital to the bondholder when due.

The investment manager may invest in instruments which can be difficult to sell when markets are stressed.

Specific risk for Libor Plus Fund:

Where high yield instruments are held, their low credit rating indicates a greater risk of default, which would affect the value of the portfolio.

The Global ABS Fund meets the definition of covered funds under Volcker regulations.

Any losses in the fund will be borne solely by investors in the fund and not by BNY Mellon (including its affiliates); therefore BNY Mellon's losses in the fund will be limited to losses attributable to the ownership interests in the fund held by BNY Mellon and any affiliate in its capacity as an investor in the fund or as beneficiary of a restricted profit interest held by BNY Mellon or any affiliate.

Ownership interests in the fund are not insured by the FDIC, are not deposits, obligations of, or endorsed or guaranteed in any way, by BNY Mellon. Neither BNY Mellon nor any of its controlled affiliates (which includes the fund's general manager/ managing partner/ investment adviser), may directly or indirectly, guarantee, assume, or otherwise insure the obligations or performance of the fund or of any other covered fund in which the fund invests.

Investors should read the fund's offering documents before investing in the fund. Information about the role of BNY Mellon, its controlled affiliates, and their employees in sponsoring or providing services to the fund are described in the Volcker Rule section of the offering documents.

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