Threadneedle Investments is offering a new bond fund blending its investment-grade and high-yield-grade bond expertise.
The strategic bond fund aims to offer investors higher returns with lower risk through exposure to a mix of corporate and high-yield bonds by combining two of its existing bond products.
The fund, to be launched on October 27, is Threadneedle's first new fund since 1999. It will spread its investment between AAA-rated and high-yield bonds as market conditions change, with the aim of a return of 7 per cent a year.
UK corporate bond fund manager Ted Bacon will run the fund. Initial charge is 3.75 per cent and annual 1.25 per cent. Minimum investment is £2,000.
Director of communications Richard Eats says: “Bonds are already starting to pay a bigger part in investors' portfolios. We still think equities will give the best return in the longer term but we believe the difference will be less.”
Halton Insurance Service director Mike Fry says: “I think this kind of product will become more a normal part of people's portfolios. People are looking for safe havens.”
Threadneedle Investments will stay part of Zurich Financial Services following Deutsche Bank's agreement to take over Zurich Scudder Investment.