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Investec launches global defensive bond UCITS

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Investec Asset Management is to launch a global defensive bond UCITS for the firm’s co-head of fixed income, John Stop

Investec Asset Management is to launch a global defensive bond UCITS for the firm’s co-head of fixed income, John Stopford reported Citywire Global this week. The decision comes at a time when global yields remain nominally low with fear pervading the market, yet the spectre of rising interest rates looms large as economies struggle with inflation. The UCITS III Investec Global Defensive Bond Fund will allow Stopford to take both long and short positions to diminish volatility. Investec’s fixed income and currency teams will support Stopford in running the fund. The portfolio will be able to trade emerging market government bonds in local currencies from a basket of 40 to 50 currencies. “We wanted to create a Luxembourg fund that owned government bonds if markets rally, but also take a short position on government bonds if yields go up,” explained Stopford.

 
“Developed market government bonds are trading at low levels, while cash returns are negative when adjusted for inflation. We also have the ability to go up and down the credit spectrum, so own high yield at times, or higher quality bonds, depending on where we are in the business cycle and the risk to corporates.” Stopford said that he had a positive view on corporate bonds. Around 25 per cent of the fund is in investment grade corporate bonds with 15 per cent in high yield corporate bonds. It also holds around 20 per cent in emerging market government bonds, which Stopford said was “an improving part of the market place”. The rest of the portfolio is composed of cash and developed market government bonds.  

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