Dec 2017-Jan 2018

FUND LAUNCHES: A European first

Blockchain, BitcoinThe past few weeks have seen the launch of europe’s first bitcoin mutual fund, along with two fixed income responsible investment products.

Tobam has launched what it claims is Europe’s first bitcoin mutual fund.

The Tobam Bitcoin Fund will be an unregulated alternative investment fund and will be domiciled in France.

The €8 billion asset manager, based in Paris, said the fund would give institutional investors exposure to the cryptocurrency in a convenient and safe vehicle for the first time.

While acknowledging bitcoin’s high level of volatility – which has seen it swing in value from less than $1,000 (€850) to more than $12,000 since March – Tobam says that the fund will provide significant diversification opportunities for investors.

The firm’s president, Yves Choueifaty, said it had conducted extensive research from a technical, financial, economic and regulatory point of view on bitcoin for more than a year before launching the fund.

“This first move in the world of cryptocurrencies showcases our dedication to remaining ahead of the curve and to provide our clients with innovative products in the context of efficient markets,” he said.

The launch in late November took place as bitcoin’s value was surging to a then-record high of about $8,300, amid fears that the cryptocurrency might be in bubble territory.

Within weeks, the price of a bitcoin had soared past $12,000.

Clean energy income
Gravis Advisory, an investment management group based in London, is to launch a clean energy income fund that will cap its charges at 0.8%.

The firm said it expected the VT Gravis Clean Energy Income Fund to deliver a yield of 4.5% per annum from launch, paid quarterly and net of charges.

Gravis is owned by Gravis Capital Management, which has invested more than £500 million (€563 million) in renewable energy projects over the past five years.

Its £2 billion of assets under management include a FTSE 250 investment company, GCP Infrastructure Investments Limited.

The core holdings of the fund will be in closed-end investment companies and companies that own operational clean energy assets, listed globally, and which deliver cash flows to support dividend distributions. Around this core, the fund will own equity and potentially debt of companies whose primary operational activities are directly linked to the clean energy theme.

The fund’s two-week initial offer period offered shares at £1 and a minimum investment of £100.

Short-duration global credits
Dutch funds house Robeco has launched a short-duration version of its Global Credits strategy. This aims to provide investors with an unconstrained approach to global credits investing while focusing on the shorter end of the market.

The Global Credit – Short-Maturity fund, managed by Victor Verberk and Reinout Schapers, will be mostly invested in developed investment grade corporate bonds with a maximum maturity of six years.

Portfolio managers will have the flexibility to invest in emerging credits, high yield and securitised credits.

Verberk said: “Short-duration credits have historically delivered higher risk-adjusted returns than longer-dated credits due to a low-risk anomaly in credit markets.

“Turnover and transaction costs of a short-duration credit fund are also lower, as short-dated credits are typically held until maturity. This makes strategic allocation to short-duration credit bonds in a fixed income portfolio a sensible thing to do.”

Bond SRI from Candriam
Candriam Investors Group has added to the nascent market in socially responsible investment (SRI) funds that invest in bonds.

The Brussels-based firm’s latest product is the Candriam SRI Bond Global High Yield fund. This limits exposure to issuers with unsustainable growth models and low regard for the environment or social values, says Candriam.

The firm, which has €111 billion in assets under management, said it believes companies that embrace sustainability-related opportunities at the same time as financial opportunities are the most likely to generate financial returns.

Wim Van Hyfte, global head of responsible investments and research, said: “We believe that a comprehensive appraisal of the ESG [environmental, social and governance] opportunities and risks of issuers is essential to make fully informed investment decisions in the fixed income space, including high yield corporate credit.”

The actively managed fund is registered for marketing in the UK, Luxembourg, Germany, France, Spain, Italy, Switzerland and the Netherlands.

M&G’s ESG global bond
London-based M&G Investments has launched a high yield global bond fund that will incorporate environmental, social and governance (ESG) factors.

The strategy, to be co-managed by James Tomlins and Stefan Isaacs, will use a three-stage screening process to filter out firms in breach of the United Nations’ Global Compact principles and companies that derive revenue from tobacco, alcohol, adult entertainment, gambling, coal, defence and weapons.

At least 80% of the M&G ESG Global High Yield fund is invested in high yield bonds issued by companies located in any country, including emerging markets, and which may be denominated in any currency.

The fund may also invest in bonds issued by governments, investment grade corporate bonds, asset-backed securities, cash and assets that can be turned quickly into cash.

Tomlins said: “Focusing on negative screening and ESG integration, the fund strikes the right balance between being able to express investment views and responsible investing outcomes.”

Global bond ESG
The UK arm of Nomura Asset Management has launched a European high-yield bond fund.

The Ireland-domiciled Ucits fund seeks to capture European high yield bond market returns while minimising losses by identifying ‘strong horse’ companies that can carry debt load through the economic cycle.

The Nomura Funds Ireland European High-Yield Bond Fund has a benchmark performance target of 2% per annum.

Portfolio manager Steven Rosenthal said: “We believe that European high yield bonds have earned a place in an investor’s tactical allocation, offering an attractive portfolio diversification opportunity marked by high risk-adjusted yields and low default rates.”

Nomura’s European high yield bond strategy has outperformed its benchmark each year with an annualised return of 9.3%.

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