UK – Threadneedle Investments has a fund for investors seeking to diversify their bond portfolios in the face of declining interest rates.
The new Absolute Return Bond Fund was pegged as an “innovative solution”.
“Painful memories of bear markets in equities and bonds are leading them to look for products with returns which are uncorrelated to these assets and which can generate positive, stable returns,” said a Threadneedle spokesperson.
The fund – developed towards the end of last year - will invest in a combination of money market investments, bonds and bond market derivatives to achieve high alpha in any stock market environment.
Benchmarked against cash rather than an index and employing long and short strategies, the fund is thought to be ideal for clients seeking positive returns against any market backdrop, the spokesperson added.
The fund will be headed by three directors: Quentin Fitzsimmons, Myles Bradshaw and Peter Allwright.
Allwright joined Threadneedle this month from Gartmore, where he managed gilt and index-linked products. He has replaced no one at the firm.
According to Threadneedle, the Fund appeals to larger and smaller pension funds. A minimum investment of £500,000 is required from institutional investors.
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