TRADE FINANCE HERO

GIB Global Trade Finance Strategy

Trade finance is an emerging but important asset class. It plays a vital role in the facilitation of global trade, providing the capital for buyers and sellers of tradeable goods. This enables an increase in production and distribution to meet global demand.

The growth of trade finance as an investable asset class stems from the shortage of finance available to support international trade. The global trade finance gap is currently estimated to be $1.5trn* and has led to a demand for alternative forms of finance to fill this gap. This offers a unique opportunity for institutional investors to be involved in selective trades for investment across this attractive and important asset class.

*Source: Asian Development Bank, 2019

Characteristics

1

Diversification, with low to zero correlation to other major asset classes

2

Steady and stable income potential as a liquid, short-duration yield enhancer

3

Low-volatility investment, with in-built liquidity based on short trade life-cycle

4

Capital preservation owing to its idiosyncratic risk profile

Approach

We have developed a simple approach to trade finance, removing many of the complexities associated with this asset class. This enables investors to harness its attractive characteristics.

Our robust risk management process applies an international credit rating methodology to assess counterparties, enhancing transparency for our clients. We aim to ensure that our transactions promote a sustainable economy by subjecting each one to a rigorous ESG screening process. We also engage with counterparties to encourage improvement where necessary.

Portfolio overview

World embossed

Diversified across countries, industries and underlying goods

Group

Maximum exposure of 25% of AUM in any one commodity, region, industry or type of goods

Percent

Maximum single obligor limits as a percentage of AUM in any one portfolio

Trade finance offers a new source of yield, as well as diversification from more traditional asset classes

To discuss how this strategy can fit within your overall portfolio, please contact our solutions team

T: +44 (0) 20 7259 3149
E: solutions@gibam.com

Related Documentation

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