Kames Capital has launched a Dublin-based US dollar-denominated short dated high yield bond fund.
The Kames Short Dated High Yield Global Bond fund, will be managed by Stephen Baines and David Ennett, supported by Jack Holmes.
The fund aims to deliver a “mid-single digit percent per annum returns through the cycle, while maintaining low interest rate and credit sensitivity,” the company said in a statement announcing the launch.
The fund managers will be supported by Kames five-strong high yield team, which also includes bond veteran Phil Milburn, head of fixed income investment strategy. The team is currently responsible for US$2bn of global high yield bond mandates and is part of the wider 28 strong Kames Capital fixed income team.
The fund has a global remit to maximise its opportunity set and adopts an investment process that utilises Kames’ strong stock picking ability, while aiming to deliver lower risk returns with a sub two-year duration target, a five and a half year issue maturity limit, and a focus on the BB and B rated segments of the corporate bond market, Kames said.
“We have a 14-year track record of managing a dedicated global high yield strategy and delivering risk-adjusted returns,” said fund manager Baines. “We believe it is beneficial to adopt an active, high conviction approach with a global remit. This allows us to avoid the pitfalls of sector and issuer concentrations that develop from time-to-time within the index.
“Our analysis shows that both in periods of deteriorating credit risk and rising government bond yields, short-dated high yield bonds have shown greater price resilience than the broader high yield bond market. They also offer returns that are negatively correlated with government bond market returns.
The Kames Short Dated High Yield Global Bond fund is Dublin-domiciled and has US dollars as its base currency, although it also has Sterling, Euro, Swiss Franc and Swedish Krona share classes.
Kames Capital is an investment management business based in Edinburgh and London, It manages £45.3bn (€53bn) on behalf of UK and international clients – including pension funds, government agencies, financial institutions, wealth managers, family offices and financial advisers.