Joshua Lohmeier’s debt fund at Aviva Investors has outperformed 94% of peers over the past year. With signs that a recession is nearing, he is playing those concerns by investing in bonds better insulated from a downturn, while keeping some riskier debt.

“We prefer to have more BBB rated securities in shorter maturities and more defensive, higher-quality corporates in longer maturities,” said Lohmeier, head of north American investment grade, in an interview at Aviva Investors’ Singapore office last week. “We need to build a portfolio that acknowledges the very real risk of recession, even if it’s not right around the corner.”

Lohmeier is among a growing chorus of credit investors who are becoming more picky about the corporate bonds they want to hold, as geopolitical risks and slowing economic growth increase the downside potential of some investments. The International Monetary Fund lowered its 2019 global growth forecast earlier this month to a decade-low of 3%, citing a broad deceleration across the world’s largest economies as trade tensions undermine expansion.

That said, some parts of the U.S. economy, such as the services sector remain “very strong,” according to Aviva’s Lohmeier, who added there is no way to run away from risk completely. With interest rates falling across the globe in 2019 and an increased swathe of negative-yielding debt out there, investors are also faced with extra pressure to take more risk to earn yield, he said.

Lohmeier’s flagship $3.3 billion Global Investment Grade Corporate Bond Fund has delivered investors a return of more than 12% over the past year.

“In this environment, a credit investor should think about where they are getting paid to take risk today and where they aren’t,” he said. “Downside protection is key.”

This article was provided by Bloomberg News.