The fund is aimed at investors with a medium to long term outlook, seeking income with a potential for capital growth.
It has a target yield of 7 per cent and will offer a wide spectrum in terms of appetite for risk, with the ability to switch from a conservative to an aggressive stance if required.
It will be managed by Ariel Bezalel, who has 10 years experience working in credit markets at Jupiter. He currently manages the fixed interest components of three unit trusts – Jupiter global managed, Jupiter high income and Jupiter monthly income.
Bezalel will hold around 60 instruments in the portfolio, with a focus on European credit. The fund will have a minimum of 20 per cent in high yield instruments as he seeks to invest in areas offering the opportunity for good capital growth and in government bond markets in times of stress.
He believes credit markets present a potentially historic opportunity with valuations, particularly in the investment grade space.
He says: “The investment grade market is pricing in a severe recession and the high yield market is pricing in a sharp rise in defaults. Whilst I am cautious on the economic outlook, current valuations seem to offer potentially handsome rewards for the risk. This situation, in my view, presents the most compelling investment opportunity in credit we have seen for many years.”