Ignis Asset Management has confirmed this week that it plans to launch a government bond fund at the end of March.
Ignis Asset Management has confirmed this week that it plans to launch a government bond fund at the end of March. The Ignis Absolute Return Government Bond Fund, a Lux-domiciled UCITS III SICAV, is to be managed by Head of Rates, Russ Oxley, and the firm’s Chief Economist, Stuart Thomson. The fund will target returns of 2 per cent to 3 per cent p.a. in excess of cash2 and represents the first retail fund to be launched by Ignis’s Rates Team who manage over GBP28billion of institutional assets. A portfolio of global government bonds and currencies will be traded. Investors will for the first time enjoy exposure to Ignis’s rates process. This involves breaking down the government yield curves of developed countries into discrete forward rates, enabling Oxley and Thomson to exploit pricing anomalies and express these views through a series of long and short positions. “The unique Ignis ‘forward rates’ process, which splits discount yield curves into their constituent forward rates rather than simply taking an average, is capable of turning these and future distortions into returns for investors,” explained Oxley. In addition to government bonds, money market instruments and derivatives will also be used, with the portfolio’s foreign currency exposure limited to 25 per cent. Further welcome news to investors is that Ignis will only charge a 1 per cent annual management fee. “As an absolute return vehicle, this fund will provide returns lowly correlated to traditional equity and bond funds and if rates rise, should provide an effective hedge against inflation,” said Ignis Sales & Marketing Director, Jonathan Polin.
