SocGen Asset Management has entered the corporate bond fund market for the first time with a sterling corporate bond unit trust.
The fund will invest in a portfolio of 40 to 50 corporate bonds issued by UK companies. At least 80 per cent of the fund will be invested in corporate bonds with a rating of BBB and above. The remaining 20 per cent will be invested at the discretion of the fund managers. The fund will not invest in junk bonds.
Based in London, the trust will be managed by Paul Rayner and Stephen Peirce. Rayner joined SGAM in 1998 as an economist and fixed-income specialist. He was joined in 2000 by Peirce, who has worked for Teachers Investment Management.
Corporate bonds rated BBB and above offer less attractive yields than funds with a rating of BB or lower but they are more stable than funds that have lower ratings and this can be attractive when markets are volatile.
According to Standard & Poor's, the SGAM UK growth fund is first quartile, the UK inc- ome and European growth funds are second quartile and the technology and Japan growth are third quartile, based on £1,000 invested on a bid-to-bid basis with net income reinvested over one year to April 23, 2001.