Core Score: How a New Approach to Credit Investing May Harness More Alpha

Investors historically face challenges in achieving alpha through security selection in the corporate credit market, marked by complexity and over 20,000 securities. A new scoring methodology, termed the "core score," aims to enhance alpha generation by integrating quantitative and fundamental research.

This model combines thorough due diligence, which evaluates bonds against various market conditions, with quantitative factors linked to historical outperformance. By creating a single score that reflects both fundamental and quantitative insights, portfolio managers can more effectively identify mispriced securities.

The core score model is updated daily, allowing investors to capitalize on market dynamics and idiosyncratic opportunities, particularly relevant amid current global credit volatility. This flexible and data-driven methodology positions investors to better harness potential alpha through informed bond selection and responsive portfolio management.