Deutsche Asset Management has brought out the new Deutsche corporate bond + fund.
Created as an open-ended investment company (Oeic), the fund is designed to provide income. It is aimed at cautious investors who are looking for exposure to the stockmarket, but with a low level of risk attached as well as a higher rate of return than a building society account.
The Oeic will invest in two areas of the corporate bond market. Eighty per cent of the fund will be invested in UK-based investment-grade bonds with a rating of BBB or above, along with a small number of European investment-grade bonds. Some of the corporate bonds the fund will invest in will include those issued by Allied Domecq, Daily Mail, Clerical Medical, Transco and WorldCom.
The remaining 20 per cent will be invested in global corporate bonds, with the majority based in the US. These will be non-investment-grade or junk bonds, which have a higher yield but are also higher risk.
Two share classes are available; A-class shares for retail investors and B-class shares for people wishing to invest more than £500,000.
Responsibility for managing the fund will rest with a seven-strong team based in London, headed by Charles McKenzie. The team will liase with other Deutsche bond research teams, based in Philadelphia and elsewhere.
McKenzie joined Deutsche in Frankfurt in 1993 and managed the global fixed income portfolio. In 1997 he transferred to London to join the fixed income team.
According to Standard & Poors the Deutsche high income fund is ranked 37 out of 37 funds, based on £1,000 invested on a bid-to-bid basis with gross income reinvested over three years to August 27, 2001.