The fund aims for income and growth by moving between different areas of the
fixed income market throughout the investment cycle. It has a net target
yield of 5.3 per cent at launch and will be managed by BNY Mellon subsidiary
Standish, a US-based fixed income specialist.
Standish global head of fixed income fund management David Leduc and senior
portfolio manager for global fixed income Tom Fahey will run the fund.
Leduc has more than 22 years experience in fixed income investments and
joined Standish in 1995. He previously worked for State Street Bank & Trust
company. Fahey, who has 13 years investment experience, joined Standish in
1999 from the Bank Credit Analyst Research Group in Montreal.
The managers will look for the most attractive oportunities in line with the
IMA Sterling Strategic Bond sector requirements of at least 80 per cent in
sterling denominated assets or assets that are hedged back into sterling.
BNY Mellon says that the diversification that results from being able to
invest globally across different areas of the fixed income market can smooth
out the effects of the market cycle, so that the fund can capture
opportunities in various countries and sectors. It says that UK corporate
bond yields are very attractive relative to government bonds, but focusing
on one region or sector within the global fixed income market may increase
risk and result in missed opportunities further afield.
This fund may be popular with advisers who are looking for a fund with lower
volatility than equities and which takes care of asset allocation within
bond markets. However, timing is of the essence as moving in and out of
sectors too early or late could hurt performance.