Scottish Equitable International has introduced the UK corporate bond fund.
Aimed at cautious investors, the Luxembourg-based fund will invest in UK corporate bond funds that have been awarded investment grade credit ratings of between BBB and AAA by credit reference agencies such as Standard & Poors and Moodys. Some of the 60 companies that the fund will invest in will include companies such as Glaxo Wellcome, Barclays, Midland, Wall-Mart, Unique Pubs and Royal Bank of Scotland.
Although the fund is run by Scottish Equitable International, the investment advice will be provided by Aegon Asset Management UK. Both companies are part of Aegon UK. A team of 12 investment specialists from Aegon will manage the fund, headed by Malcolm White, who has been working for the company for the past 12 years. He also managed the Aegon UK fixed interest pension fund from 1998 to 2001.
Although investment grade bonds have low rates of returns, they also have low levels of risk. Sales of corporate bonds went from £222.6m in 2000 to £318m in 2001.
According to Standard & Poors the Scottish Equitable International UK Equity fund is ranked 61 out of 154 funds, based on £1,000 invested on a bid-to-bid basis with gross income reinvested over one year to May 7, 2001.