Investec Asset Management has launched a new credit strategy for UK clients seeking both yield enhancement and capital preservation.
The new fund, dubbed Investec Global Total Return Credit Fund (OEIC), is a sterling denominated UK replica of an existing Sicav that was rolled out in June last year.
It targets a return of above three-month GBP Libor plus 4% per annum over a full credit cycle.
The fund will invest in 80 to 120 of the best ideas across global credit, creating a diverse portfolio with low volatility and low sensitivity to interest rates.
Investec Asset Management managing director of UK client group David Aird said: “As traditional fixed income continues to fail to deliver meaningful returns, investors should protect against the double whammy of persistent low yields coupled with the potential impact of rising rates.
“Many UK clients are wising up to the fact that government bonds could generate severe losses in this environment, and are seeking an alternative to, for example, strategic bond funds.”
The new vehicle will be co-managed by Jeff Boswell and Garland Hansmann.
“Investors are increasingly focused on sourcing attractive income streams. We believe this solution is well positioned to provide access to an unconstrained credit portfolio that aims to deliver on the requirement for enhanced yield,” Boswell stated.