Investec has launched a credit strategy in the form of an open ended investment company (Oeic) for UK investors intent on both yield enhancement and capital preservation, the fund provider has said.
The Investec Global Total Return Credit fund includes JLT Investment Solutions as a seed investor. The portfolio will seek out investments across the global credit universe, looking for securities that offer low volatility and low duration, and applying an unconstrained approach to find what it believes are the 80-120 best ideas.
The fund is a sterling denominated UK replica of an existing Sicav that launched in June 2017. That fund has returned 8% annualised since inception, Investec said. The new fund has a target of total return above 3 month sterling Libor + 4% per annum over a full credit cycle. Volatility targeted is in the 5%-7% range per annum.
Explaining further the reasoning behind the launch, David Aird, managing director, UK Client Group at Investec Asset Management, 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.”
Co-managers of the fund will be Jeff Boswell and Garland Hansmann.