Buy and Maintain: Capturing the credit risk premium

Buy and maintain credit strategies have emerged as a cornerstone for institutional investors seeking to align investment portfolios with long-term liabilities and regulatory requirements. Designed to deliver predictable cashflows and capture the credit risk premium with minimal turnover, these strategies are particularly well suited to pension funds and insurers managing long-duration commitments.

While the appeal is clear, the implementation varies significantly across asset managers - from differences in portfolio construction and credit tolerance, to views on active trading and global diversification. At a recent cio investment club roundtable, senior asset owners and investment professionals shared how they assess buy and maintain managers, the importance of philosophical alignment, and the operational structures needed to ensure long-term success in this increasingly essential part of the fixed income toolkit.