Ignis Asset Management is preparing the launch of its Ignis absolute return government Bond fund, scheduled for the end of March.
Russ Oxley, the head of rates, and Stuart Thomson, the chief economist, will manage the fund. They will invest primarily in developed market sovereign bonds and AAA supranational bonds.
In addition, Oxley and Thomson can take long and short positions in money market instruments and derivatives. Their foreign currency exposure will be limited to 25 per cent.
The Luxembourg-domiciled Ucits III Sicav will target net returns of 2 per cent to 3 per cent per year in excess of cash; it will aim to keep volatility low and the portfolio diversified.
The rates team at Ignis uses a method that breaks down developed country government yield curves into discrete forward. This approach allows the managers to target specific forward rates and enables them to exploit pricing anomalies more accurately, through long and short positions.