Investec launches new bond fund

Investec’s Jeff Boswell and Garland Hansmann will co-manage the recently launched Investec Global Total Return Credit fund.

The fund’s strategy aims to cope with an investment climate of rising interest rates and low yields. The unconstrained fund will invest in a wide range of global credit securities, including floating rate notes and structured debt.

The fund is set to offer a diversified portfolio that provides high-yields yet is still relatively defensive, with low levels of volatility and minimal sensitivity to interest rates. The fund will fall into the IA Sterling Strategic Bond sector.

Launched for UK clients

Launched due to demand from UK clients, the OEIC fund is a sterling-based UK ‘copy’ of the SICAV, which Investec launched last June for Global customers.

David Aird, Managing Director for Investec’s UK client group states, “The demand we have identified for the OEIC just in the UK means we expect it will grow quite quickly. I think in the first year we would be through £100m quite quickly.”

The fund launches with £14m seeding funding from JLT Investment Solutions. The standard annual management charge will be 0.75%, although seed investors on the first £250m will only incur a charge of 0.45%.

Paul Chapple, Investment Director at JLT believes Investec’s strategy is well positioned to offer decent risk-adjusted returns more quickly than traditional fixed income, given the current interest rate climate and credit cycle.

Fund Manager Hansmann adds: “In a world of rising interest rates, and with the accompanying increase in volatility, our diversification and nimble investment approach allows us to capitalise on a broad global credit opportunity set.”

The Investec Global Total Return Credit fund will target a total return in excess of three month GBP LIBOR plus 4% per annum over a full credit cycle (gross of fees), with volatility between 5% and 7% per annum.

(First appeared on May 15 2018)

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All figures correct as at 08.02.2019.