EUROPE - F Asset Management ("F") has launched a e50m Euro inflation linked bond fund in response to pension funds' "increasing demand for real returns".
The Luxembourg-domiciled fund will invest in inflation linked debt securities of European government and corporate issuers, European government agencies and supranational institutions. The fund may also invest 20% of its portfolios in conventional European government bonds, F added.
Fund manager Lionel Oster (pictured) said an actively managed inflation linked bond could help generate alpha through modifying the duration of a portfolio, taking positions along the yield curve and balancing overweights/underweights versus conventional bonds.
“As longer-term inflation expectations rise, investors’ desire to protect investments from inflation and gain greater certainty about the real rates of return will also increase,” he said.
“We believe inflation-linked bonds can help meet pension funds’ increased demand for real returns.”
Patrick Johns, head of UK institutional, said this year F had been awarded more than e400m from a variety of European investors including large institutional investors in Switzerland and France, and BVP in Austria.
Oster’s objective is to generate a combination of capital growth and income and performance will be benchmarked against the Barclays Euro Inflation-linked All Maturities index.
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