RLAM launches Duration Hedged Credit Fund
Royal London Asset Management (RLAM) announces that is has launched the Royal London Duration Hedged Credit Fund.
This follows the launch of the Royal London European Corporate Bond Fund in August, capitalising on RLAM's expertise within corporate bonds and enhancing its range of credit funds. Both funds have been specifically designed to meet investor demand, with the Duration Hedged Credit Fund of particular interest to pension schemes looking to manage their liabilities whilst seeking positive returns.
The Royal London Duration Hedged Credit Fund seeks to achieve a positive total return in all market conditions by investing in investment grade credit across a range of maturities, as well as having the capability to hold UK government securities and other debt instruments. Importantly, it uses derivatives to reduce interest rate risk by taking duration close to zero. The Fund is managed by Paola Binns and Shalin Shah of RLAM's award-winning Fixed Interest team and targets an annual return of 2% over its benchmark, 3 month LIBOR.
Susan Spiller, Head of Marketing at RLAM comments: "RLAM is committed to offering products that are aligned with our clients' investment objectives and needs, as well as our investment expertise. This underlies the decision to launch the Royal London Duration Hedged Credit Fund, which boosts our credit fund range whilst capturing the skill sets of our highly experienced team."
Paola Binns, fund manager, adds: "We believe corporate bonds represent outstanding value, offering relatively high income generation in an environment of protracted low UK base rates. We particularly like bonds with risk-mitigating characteristics, such as structural enhancements or a claim on assets or cashflows, which we perceive to be cheap at current pricing levels. The Royal London Duration Hedged Credit Fund gives investors the opportunity to benefit from these types of investments without exposing themselves to the risk of a move higher in government bond yields."