US asset manager Capital Group has unveiled plans to launch its US corporate bond strategy for European investors on 21 March 2017.
The Ucits strategy will be domiciled in Luxembourg. It seeks risk-adjusted returns by investing primarily in investment grade US corporate bonds.
The strategy relies on a research-driven and fundamental active approach. Investment decisions are driven by multiple security- and industry-specific factors.
The US Corporate Bond strategy will be the fourth fund Capital Group is making available to European investors, with the Capital Group New Perspective Fund (LUX), the Capital Group Investment Company of America (LUX) and the Capital Group New World Fund (LUX).
Jeremy Cunningham, investment specialist at Capital Group, said: “For many European investors facing the challenge of low yields in domestic bond markets, US investment grade corporate bonds offer an attractive way to access higher yields without significant additional risk exposure. For investors concerned about buying US bonds, with the Fed likely to hike rates, it’s interesting to note that US corporates have typically fared well in periods of gradual rate rises.
“We believe our deep, fundamental research capability in an asset class relatively under-researched by comparison with equities, offers an exciting opportunity to generate returns from security and sector selection. This focus on bottom-up analysis is particularly important in the current environment of rising US rates, and relevant now as we are relatively late in the credit cycle in the US so there are fewer macro tailwinds to help portfolios.”
Hamish Forsyth, European president of Capital Group, added: “This new fund launch is the latest example of Capital Group’s ability to bring to a wider audience the proven benefits of its attractive investment strategies that have previously been available only to US investors. It provides further evidence of our commitment to continue to build our business across European markets.”
Capital Group had over $1.4trn (€1.31trn) of assets under management as of 31 December 2016, $260bn (€243.7bn) of which were in fixed income assets.