Hermes Fund Managers launched a UK inflation-linked bond fund on Wednesday based on a strategy that has achieved a 12.6% return per annum over the last three years.
Hermes, which is owned by the British Telecom pension scheme and specialises in institutional asset management, has structured the Hermes UK Active Inflation-Linked Fund as a Ucits product.
The firm says its UK active inflation-linked strategy has enjoyed strong performance over the past decade with the composite UK index-linked portfolio placing in the top quartile in the Mercer universe over one, three, five and 10 years. The return over the last three years gained a outperformed its benchmark by over 1% per annum on a relative basis.
Penni Coe, head of Hermes global government and inflation bonds, said: “While UK inflation looks to have temporarily peaked, it remains stubbornly high. Uncertainty regarding the long-term impact of [quantitative easing], high commodity and utility prices coupled with volatile food prices offer little reason to believe it will fall below the Bank of England’s 2% target on a consistent basis.”
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