John Hancock Investment Management, a company of Manulife Wealth & Asset Management, announced that it has launched John Hancock CQS Asset Backed Securities Fund with its affiliated investment manager Manulife | CQS Investment Management (Manulife | CQS), a London-based multi-sector alternative credit specialist.
The fund’s investment objective is to seek to generate a return comprised of both current income and capital appreciation. The Manulife | CQS team looks to access diversified and steady sources of income in an actively managed portfolio of asset backed securities (ABS) such as residential and commercial mortgages, bank regulatory capital and collateralized loan obligations. In pursuit of the fund’s objective, the portfolio managers seek to achieve risk-adjusted returns by investing in ABS subsectors that have exhibited low correlations to credit and equity markets. The team seeks to enhance returns by exploiting inefficiencies in the pricing of credit and related risks in the ABS market, while seeking to buffer volatility and mitigate risk.
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“We’re thrilled to announce the launch of our second fund in collaboration with Manulife | CQS Investment Management. This fund brings their expertise in asset-backed securities investing to advisors and their clients, catering to the growing demand for alternative investment solutions,” said Kristie Feinberg, Head of U.S. and Europe at Manulife Investment Management, and John Hancock Investment Management’s President and CEO. “This new fund offers investors additional opportunities to diversify their credit allocation, potentially increase income, and leverage the broader benefits of the asset class with the seasoned management of the Manulife | CQS team.”
“ABS is at the very core of our alternative credit platform, a strategy we’ve been managing for the better part of 19 years,” said Soraya Chabarek, CEO, Manulife | CQS Investment Management. “Launching alongside our Multi Asset Credit strategy on the John Hancock fund platform will offer a line-up that is focused on income generation potential while mitigating the downside. We are excited about what ABS markets can offer John Hancock investors: a diversifier to their credit allocations and the potential for high levels of stable income through accessing the real economy. We think the real benefit of ABS is its global, diversified nature, allowing our dedicated ABS team to select the right geographies, sectors, and different parts of the capital structure to help seek consistent risk-adjusted returns.”
Jason Walker, Co-Chief Investment Officer of Manulife | CQS Investment Management and portfolio manager of the fund said, “I’ve been investing in ABS markets for almost 30 years and on average my dedicated team has been active in these markets for 20 years. It is an exciting space and a $4.5 trillion market. We see compelling opportunities for investors across ABS subsectors which have historically exhibited low correlation to broader equity and credit markets. To take advantage of opportunities, detailed bottom-up credit analysis and sophisticated analytics capabilities are essential. We focus on assets that may offer high levels of income, which serve to help buffer portfolios against volatility. We also look for strong credit quality that can help to protect against potentially deteriorating macroeconomic and borrowing conditions.”
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John Hancock Investment Management continues to expand its alternative investment capabilities having launched three alternative funds last year including: John Hancock CQS Multi Asset Credit Fund Class I, John Hancock Disciplined Value Global Long/Short Fund Class I, and John Hancock Manulife Private Credit Plus Fund Class I. The firm believes interest in alternative and private markets solutions will continue to grow and provides a range of additional strategies to meet the demand of advisors, their clients, and qualified investors through multiple distribution platforms.
This material is not intended to be, nor shall it be interpreted or construed as a recommendation or for providing advice, impartial or otherwise. John Hancock Investments and its representatives and affiliates may receive compensation derived from the sale of and/or from any investment made in its products and services.
Diversification does not guarantee a profit or eliminate the risk of a loss.
The Fund is an “interval fund” and, in order to provide liquidity to shareholders, subject to applicable law, will conduct quarterly repurchase offers of the Fund’s outstanding common shares of beneficial interest at NAV. There is no secondary market for the fund’s shares and none is expected to develop. Investors should consider shares of the fund to be an illiquid investment. The fund’s use of leverage may not be successful and may create additional risks, including the risk of magnified return volatility and the potential for unlimited loss. ABS include interests in pools of debt securities, commercial or consumer loans, or other receivables. The value of these securities depends on many factors, including changes in interest rates, the availability of information concerning the pool and its structure, the credit quality of the underlying assets, the market’s perception of the servicer of the pool, and any credit enhancement provided. In addition, ABS have prepayment risk. Investors could lose all or substantially all of their investment. Convertible securities are subject to certain risks of both equity and debt securities. Fund distributions generally depend on income from underlying investments and may vary or cease altogether in the future. Investing in distressed debt securities is highly speculative and risky, as they often do not generate interest, may not repay principal, and can result in a total loss of the investment. Exposure to credit risk due to the types of investments and loans made by the fund. Fixed-income investments are subject to interest-rate and credit risk; their value will normally decline as interest rates rise or if an issuer is unable or unwilling to make principal or interest payments. Foreign investing, especially in emerging markets, has additional risks, such as currency and market volatility and political and social instability. Please see the fund’s prospectus for additional risks.
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Source – PR Newswire
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