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UBS Ucits 3 fund offers 2.15% above base rate

UBS Global Asset Management is to offer a Ucits 3 fund to UK investors.

The fund will be modelled on the existing abso-lute return bond strategy which has been running since last May. The new fund, which will be available from March 21, offers a gross predicted return of 2.15 per cent above Bank of England base rates regardless of market conditions or the direction of interest rates.

UBS believes the fund is a significantly low-risk alternative to cash for investors concerned about stockmarket volatility and are getting low returns on their cash deposits.

The fund will contain a global mixture of government, investment-grade, high-yield and emerging market bonds.

It will utilise new Ucits 3 regulation, applying different fund strategies to manage the exposure of the portfolio to global interest rates in a bid to reduce the risk of the fund.

The absolute return bond fund has 1.8bn of assets under management and is the ninth retail fund to be launched by UBS.

Managing director and head of UK retail Graham Kane says: “Investors today are facing a dilemma. Concerns about market volatility, coupled with a low tolerance for risk, are not normally compatible with a desire for consistent returns above those offered by standard savings accounts.”

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