Threadneedle plans to launch Global Opportunities Bond Fund in UK
Threadneedle Investments, a leading international asset manager, is planning to launch the Threadneedle Global Opportunities Bond Fund (OEIC) in H1 2015 subject to FCA approval.
The absolute return fund will be co-managed by Jim Cielinski, Head of Fixed Income and Martin Harvey, Fixed Income Fund Manager and will be a mirror-image of the €253,5m Threadneedle (Lux) Global Opportunities Bond Fund, which launched in 2011. Jim and Martin will take an unconstrained, high conviction, flexible investment approach with the aim of producing a positive return in all market environments.
The fund will invest in the best ideas generated by Threadneedle’s fixed income team of more than 40 investment professionals, covering developed and emerging market government bonds, investment grade and high yield corporate bonds, asset backed securities, currencies and fixed income derivatives. Threadneedle manages £27.9bn in fixed income.
The assets of the portfolio will be invested across a broad range of fixed income and currency strategies. This allows for diversification of active risks and increases the probability of generating returns in diverse market environments. The fund aims to achieve a target return of cash +4.5%.
Jim Cielinski and Martin Harvey have over 40 years’ experience in investment management between them. Since its launch on 24 August 2011, the Threadneedle (Lux) Global Opportunities Bond Fund has delivered annualised return of 5.54% before fees (in US dollars²) delivering on its absolute return objective of generating positive returns in all market conditions and with low volatility of around 3%.
Jim Cielinski commented: “The fixed income world is changing and the characteristics that once defined fixed income asset classes are becoming obsolete – witness the near-zero yields in some high-quality bonds. We believe that these developments represent a structural shift in fixed income markets. The Threadneedle Global Opportunities Bond Fund is designed to exploit these new investment conditions by having the flexibility and resources to invest successfully across a broad risk spectrum. I am very excited by this new product which adds to Threadneedle’s absolute return suite of products.”
The fund can be positioned to take advantage of rising bond yields, falling bond yields, or a convergence/divergence in one country relative to another. The structure of the Fund also means that an asset allocation view can be implemented in a more efficient way than would be possible in a benchmark-relative product.
Martin Harvey commented: “The flexibility afforded by derivative instruments allows us to take advantage of rising yields or rising credit spreads as and when it is appropriate, a feature that becomes invaluable as yields and spreads decline to low levels. For example, we currently favour a long position in high yield bonds, hedged by a short position in investment grade bonds.
“Currency is another important source of added value within our macro views, whereby we employ a relative value overlay of positions across a range of currencies in developed and emerging markets. For example, we position strategically to take advantage of US Dollar appreciation versus other currencies such as commodity exporters.”
Gary Collins, Head of EMEA Sales Wholesale, commented: “Following the client interest and demand we’ve seen for the Threadneedle (Lux) Global Opportunities Bond Fund since its launch in 2011, we are excited to be launching the OEIC version. Investors remain faced with the challenge of seeking returns within an ultra-low yield environment, without exposing themselves to undue levels of risk. Against this background, we believe a fund such as the Threadneedle Global Opportunities Bond Fund is a possible solution in challenging fixed income markets.”