Royal London Asset Management is launching two new funds, which will be domiciled in Dublin and available for sale in the UK from 27 February.
These are presented in response to increasing interest from investors in income generation from sub-investment grade corporate debt.
The Royal London Global High Yield Fund will aim to provide a combination of investment growth and income, targeting a return of 1% per annum above that of its benchmark, the BoAML BB-B Global Non-Financial High Yield Constrained Index.
The Royal London Short Duration Global High Yield Fund will aim to provide income, targeting a return of 2% per annum above that of its benchmark, 3 month LIBOR, while maintaining a duration position close to two years.
The funds will invest primarily in sub-investment grade debt issued by companies domiciled in the UK, Europe, Asia and the United States, across the high yield credit spectrum. They will be managed within pre-determined regional, sector and security exposures, in order to create portfolios that will deliver consistent alpha from multiple sources.
Azhar Hussain, manager of both funds, has stressed the ‘diversification and good return characteristics’ of high yield bonds; expressing his belief that these new funds are ‘ideally suited to taking advantage of the current environment’ of ‘low growth and low interest rates.’
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