UK – Independent fund management group, Fidelity Investments has launched a new UK long corporate fixed income fund, in response to what it claims is a growing demand for the asset class, particularly among small to mid-sized pension funds.
Specifically, the new fund will invest in a diversified portfolio sterling non-gilts, including corporate, supranational and agency bonds with a minimum 10-year maturity rate and investment grades of BBB or higher.
The fund will have a target return rate of 0.75% per year on a rolling three year basis, benchmarked against the Merrill Lynch Over 10 Year Eurosterling Index.
Says Anna Roads, head of research and product development at Fidelity: “Demand for corporate bonds and in particular long corporate bonds, looks set to continue due to the increasing maturity of pensions funds and issues such as FRS17. We believe this fund will help service this requirement for small and medium sized pension schemes.””
In the UK, Fidelity currently manages in excess of £8bn (€13bn) in global bonds and money market funds, nearly a third of all the assets managed by Fidelity. UK corporate bonds represent some £1bn.