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Threadneedle&#39s bond fund aims to be haven

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&#39s 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&#39 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&#39s portfolios. People are looking for safe havens.”

Threadneedle Investments will stay part of Zurich Financial Services following Deutsche Bank&#39s agreement to take over Zurich Scudder Investment.

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