A sterling short-dated corporate bond fund is being offered to investors in the UK with “concerns about bonds”.
The Aberdeen Sterling Short Dated Corporate Bond Fund is for conservative investors, said Aberdeen Asset Management, and the firm is looking to raise over £100 million (€113.5 million) for the product in the first year.
Roger Webb, head of pan-European credit at Aberdeen, said: “We are nearing the end of a 30-year bull market in bonds which raises inevitable questions about how this very important asset class within investors’ portfolios should be invested.”
Investors face capital erosion if interest rates go up over the medium to long term, said Webb.
The fund will invest in investment grade corporate bonds focusing on securities that mature within five years. This means investors can limit exposure to rising yields whilst still remaining exposed to short-dated corporate bonds to provide a “reasonable level of income in the current environment”.
The investment team has the ability to allocate up to half the portfolio to non-sterling assets that are then fully hedged back.
The fund has a minimum investment of £500 and ongoing charges figure of 0.69% for retail investors, and a minimum investment of £500,000 and charge of 0.39%* for institutions.
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