GERMANY/UK – UK fund manager Threadneedle Investments has extended its links into Europe by collaborating with Dresdner Kleinwort Wassserstein to launch a German bond certificate, “Rendite Extra Zertifikat”. The new bond certificate has a total size of e500m and invests in Threadneedle’s Rendite Strategie index, comprising of five of Threadneedle’s bond funds.
10% will be invested in the emerging bond market fund, 15% in Threadneedle’s global bond fund, 15% in the European bond fund and 30% in the European high yield bond fund. The remaining 30% will be invested in a new investment grade corporate bond fund, which will launch shortly.
The structure of the new certificate offers German investors access to the high yield and corporate bond markets, and tax advantages - income earned by the product is treated as capital gains rather than income. However, the new German government has stated it intention to extend capital gains tax.
Says Alan Ainsworth, deputy chairman at Threadneedle: “Certificates are a very popular investment vehicle in Germany. This is the first product we are specifically launching for the German market and we will be looking at further product development opportunities with our distribution partners.”
The new product will be available through banks in Germany that have an agreement with Dresdner Kleinwort Wasserstein Frankfurt. It is anticipated that the certificate will be listed on the Frankfurt stock exchange after 12 months.
Threadneedle Investments has been steadily expanding its European business, with plans to open sales offices is Paris and Geneva in the next few months. Germany is considered to be an important and growing market, and Threadneedle has seen great demand for its UK-domiciled OEIC products there. To cope with the expansion of business in Germany, Threadneedle plans to move around 10 - 15 of its London team to its Frankfurt office, bolstering the team headcount to around 30.