UK investment house Britannica Asset Management has launched two new pooled bond funds for institutional pension fund clients.
The corporate bond pension fund invests in sterling denominated investment grade corporate bonds. The fund aims to outperform the Merrill Lynch All-Maturity Non Gilt Index over three year rolling periods through active selection. The benchmark also allows asset allocation alternation between pure credit and AAA rated sovereign and supranational debt. In addition, the entire yield curve can be utilised.
The UK gilt pension fund aims to outperform the FTSE All gilts Index over rolling three years periods, and has a duration of within three years.
David Harris, head of pooled funds at BAM, said: “Corporate bonds are becoming an increasingly important asset class. This year, for the first time, they will make up a greater portion of the UK fixed interest market than government issued gilts.”
“The decision to abolish MFR makes it even more likely that corporate bonds will play a larger part in pension fund portfolios in the years ahead”, he added.
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