Below are six common questions investors ask about alternative credit, along with clear answers to help you evaluate whether these strategies deserve a place in your portfolio.
Alternative credit refers to fixed income strategies that go beyond a traditional buy-and-hold bond approach. Instead of purchasing bonds and waiting for them to mature, alternative credit managers actively identify pricing inefficiencies, relative value opportunities, and structural advantages within bond markets.
The goal is straightforward. Alternative credit strategies seek to generate returns that are less dependent on the overall direction of interest rates. They rely on active management, hedging tools, and deep market expertise to capture value that passive strategies miss.
Firms like One Oak Capital Management, LLC specialize in this area. Based in Purchase, New York, One Oak Capital Management, LLC is an SEC-registered investment adviser that applies institutionally oriented investment strategies to the investment grade municipal and corporate bond markets. The firm was founded in 2013 and has built its approach around capturing value opportunities within a disciplined risk management framework.
Traditional fixed income investing is familiar to most investors. You buy a bond or a bond fund. You collect interest payments. You get your principal back at maturity. The return you earn depends heavily on the level and direction of interest rates.
Alternative credit strategies operate differently in several key ways.
First, they are actively managed. Portfolio managers make frequent decisions about which bonds to buy, sell, or hedge based on current market conditions. Second, alternative credit strategies often use hedging instruments to reduce sensitivity to broad interest rate movements. This means your returns are driven more by the manager's ability to find value in individual bonds and less by whether rates go up or down.
Third, the return profile is designed to be less correlated with traditional bond benchmarks. If your current fixed income holdings move in lockstep with the broader bond market, an alternative credit allocation can provide a different return pattern.
Several factors may drive investor interest in alternative credit.
Interest rate volatility has increased. Over the past few years, rates have moved sharply in both directions. Traditional bond portfolios experienced significant losses when rates rose quickly, which reminded investors that "safe" bonds carry real risk. Alternative credit strategies, because they can hedge interest rate exposure, offer a way to stay invested in fixed income while reducing that specific vulnerability.
Yield compression has also played a role. When traditional bond yields are low or spreads are tight, investors look for managers who can extract additional return through active security selection and relative value trading. The bond market, particularly the municipal bond market, is large and fragmented. Pricing inefficiencies exist, and skilled managers can identify and capture them.
Additionally, investors are increasingly focused on diversification within their fixed income allocations. Holding a single bond fund or a ladder of individual bonds may not provide the diversification you need across different market environments. Alternative credit adds a layer of return generation that does not depend on the same drivers as your core bond holdings.
You can explore recent commentary on these trends on One Oak's Market Insights page.
One Oak Capital Management, LLC focuses on the investment grade municipal and corporate bond markets. The firm offers several distinct strategies to address different investor objectives.
The firm manages three separately managed account (SMA) strategies that offer different approaches to fixed income investing:
The Enhanced Municipal Portfolio is a laddered, actively managed strategy that focuses on high credit quality bonds for investors seeking tax-advantaged income. This strategy has earned a 5-star Morningstar Rating and received Zephyr's PSN Top Gun award for having a Top 10 return for the one-year and three-year periods ending December 31, 2025, in the PSN Municipal Universe. (Disclaimer: References made to awards/rankings are not an endorsement by any third party to invest with One Oak and are not indicative of future performance. Investors should not rely on awards/rankings for any purpose and should conduct their own review prior to investing. Zephyr/PSN is an asset and wealth management software marketed by Informa (LSE: INF). PSN is a database of Separately Managed Accounts managed by Zephyr. One Oak does not compensate Zephyr for inclusion in the PSN database, nor does it compensate Zephyr for consideration for, or awarding of, the PSN Top Gun designation.)
The Enhanced Taxable Municipal Portfolio combines municipal and corporate bonds to seek attractive taxable income and total return. This strategy also received multiple PSN Top Gun awards, including a Top 10 return for the one-year, three-year, and five-year periods in the PSN Municipal and Intermediate Maturity Universes. (Disclaimer: References made to awards/rankings are not an endorsement by any third party to invest with One Oak and are not indicative of future performance. Investors should not rely on awards/rankings for any purpose and should conduct their own review prior to investing. Zephyr/PSN is an asset and wealth management software marketed by Informa (LSE: INF). PSN is a database of Separately Managed Accounts managed by Zephyr. One Oak does not compensate Zephyr for inclusion in the PSN database, nor does it compensate Zephyr for consideration for, or awarding of, the PSN Top Gun designation.)
The Enhanced Short-Duration Municipal Portfolio targets investors who want low volatility and attractive tax-advantaged yields through short duration, high credit quality bonds.
Each strategy is managed by a team with decades of fixed income experience. Stephen DiTursi, CEO and Chief Investment Officer, brings 40 years of industry experience and oversees portfolio risk management across the firm. Neil Crabb, Senior Portfolio Manager, leads a team of bond specialists responsible for portfolio construction and risk management. Keith Cronin, Portfolio Manager, oversees corporate bond portfolios, including security selection and hedging. James Kim, Senior Portfolio Manager, brings experience in alternative investments and due diligence. Joseph Marren, Head of Research, oversees the firm's research strategy across all sectors and asset classes.
Every investment carries risk, and alternative credit is no exception. Informed investors should consider several factors before allocating.
Interest rate risk still exists, though active management and hedging can reduce it. No strategy eliminates interest rate sensitivity entirely. Credit risk is present whenever you invest in bonds. Even investment grade issuers can experience downgrades or, in rare cases, defaults. One Oak Capital Management, LLC manages credit risk through diversification across sectors and issuers, continuous credit monitoring, and strict credit rating controls on portfolios.
Liquidity risk is another consideration. Some bonds may be harder to sell quickly at a fair price, particularly during periods of market stress. One Oak addresses this by analyzing the marketability of each security in the portfolio for its ability to offer ongoing liquidity. The firm utilizes Bloomberg, Fabkom, and research from multiple sell-side firms to support its analysis.
Duration risk, the sensitivity of bond prices to changes in interest rates, is a factor One Oak actively manages. The firm treats duration as a key market risk that requires constant monitoring and adjustment.
Manager risk also applies. Alternative credit strategies depend on the skill and judgment of the portfolio management team. You should evaluate the experience, track record, and risk management process of any firm you consider. One Oak Capital Management, LLC employs a team of fixed income specialists who use a consistent analytics framework to manage distinct strategies and mitigate volatility.
Alternative credit works best as a complement to your existing fixed income holdings, not a replacement. Your core bond allocation likely provides stability, income, and a counterbalance to equity risk. Alternative credit adds a return source that behaves differently.
Because alternative credit strategies seek returns that are less correlated to traditional bond indices, adding one to your portfolio can improve diversification. If your core bond allocation loses value during a period of rising rates, an alternative credit strategy that hedges interest rate exposure may hold its value or generate positive returns.
The right allocation depends on your investment objectives, risk tolerance, and overall portfolio composition. For investors who want to maintain fixed income exposure but seek improved risk-adjusted returns, alternative credit offers a solution worth evaluating.
One Oak Capital Management, LLC reviews fixed income assets in the context of your overall investment portfolio. The firm factors in profit and loss opportunities, current relative values, and interest rate risk to provide recommendations. One Oak offers a portfolio assessment that evaluates your portfolio's current sensitivity to interest rate and credit risks.
If you want to learn more about how alternative credit strategies may fit your portfolio, you can contact One Oak Capital Management, LLC at 914-205-5821 or reach out to CEO and Chief Investment Officer Stephen DiTursi at sditursi@oneoakcapitalmgmt.com. The firm is located at 287 Bowman Avenue, Purchase, NY 10577.
Disclaimer: Pastperformance is not representative of future return performance. Fixed incomerisks include, but are not limited to, changes in interest rates, liquidity,credit quality, volatility, and duration. To invest with One Oak CapitalManagement, LLC, you must be a qualified or accredited investor. Therecan be no assurance that One Oak will implement its investment strategy or thatit will lead to investor returns. Actual results may vary materially andadversely. One Oak makes no assertion about any particular comparable firmproviding or any employee's previous employment / academic experienceguaranteeing any particular knowledge, skill or service level. The contentherein is for informational purposes only and should not be relied upon asinvestment advice. It is not intended to be (and may not be relied on in anymanner as) legal, tax, investment, account, or other advice, or as an offer tosell or a solicitation of an offer to buy any securities of any investmentproduct or any investment advisory service.
SECregistration does not imply any level of skill, training or approval of writtenmarketing material by the SEC.
