Multi-asset credit (MAC): A blend of the sweetest fixed income opportunities

Key takeaways

• MAC strategies vary widely: From liquid, broad-market approaches to less liquid, sub-investment grade solutions with differentiated return profiles.
• Blending MAC styles can support multiple objectives: Including income generation, liquidity access, and governance alignment.
• Holistic management matters: Integrated strategies offer greater cohesion, responsiveness, and risk control than sleeve-based approaches.
• Manager skill is central to outcomes: Covering credit selection, asset allocation, ESG integration and loss mitigation.
• Brandywine and BSP-Alcentra offer complementary approaches: Enabling investors to combine styles based on liquidity and long-term goals.

A dynamic approach for today’s challenges

Delivering consistent outcomes in fixed income has become increasingly complex, with investors needing to balance liquidity, risk and adaptability. Multi-asset credit (MAC) offers a flexible solution – combining assets including high yield, loans, structured credit and emerging market debt within a single allocation.

With varied styles and liquidity profiles, understanding how different MAC approaches can be tailored or blended is key to supporting individual objectives. To help make sense of this landscape, our latest paper explores three key questions:

• Which type of MAC meets different requirements?
• What makes a good MAC manager?
• What distinguishes our MAC strategies – and how can they work together?

Which type of MAC meets your requirements?

MAC strategies range from liquid, broad-market approaches to less liquid, sub-investment grade solutions. Some follow more static allocations while others rotate dynamically across credit sectors to capture short-lived opportunities.

Blending strategies across liquidity tiers can help meet income, governance, and cashflow needs. For example, combining daily and monthly-dealing MAC can broaden sub-IG exposure and diversify alpha sources. Quarterly-dealing options add further diversification.

The right mix depends on your objectives – and on selecting a manager with the skill to deliver consistent outcomes.

What makes a good MAC manager?

With no standard benchmark, evaluating MAC managers requires a different approach:

• Opportunity set benchmarks reflect the investable universe.
• Cash-based benchmarks express return targets over cash (e.g. SONIA +450bps).
• Peer comparisons highlight consistency and style across credit cycles.

Integrated portfolio construction is a key differentiator. Holistic managers manage exposures within a single portfolio, enabling dynamic allocation, better liquidity layering, and reduced unintended risks.

ESG integration is increasingly important. Transparency around scoring, climate metrics and stewardship helps assess how ESG is embedded in practice – not just in policy.

What distinguishes our MAC strategies – and how can they work together?

Sub-investment grade credit plays a central role in MAC, driving income and diversification. Franklin Templeton’s specialist managers offer two distinct approaches:

Feature	Brandywine Global MAC	BSP-Alcentra Global Multi-Credit Solution
Credit selection	Global HY, EM, structured credit (ABS/CMBS), loans	EU and US Loans and HY, structured credit (CLOs), special situations
Liquidity	Typically daily/weekly dealing	Monthly dealing
Target Return	Mid-single digit p.a.	High single digit p.a.
Benchmark	Blended opportunity set index	SONIA +450bps/Blended opportunity set index
ESG integration	Proprietary scoring, engagement	Exclusions, scoring, stewardship, engagement
Vehicle availability	Separately managed account	Separately managed account, SICAV-SIF

These differences reflect distinct philosophies and portfolio construction styles – each with its own strengths. Used together, the strategies can layer liquidity, diversify alpha sources, and enhance portfolio resilience – helping investors meet income needs while navigating today’s complex credit environment.

MAC: A strategic solution for evolving credit needs

MAC offers a flexible way to meet evolving credit needs – combining income generation, liquidity management and diversification within a single allocation. With varied styles and implementation approaches, understanding how different strategies can be used individually or together is key to building resilient portfolios.