The new fund is lead managed by Mickael Benhaim, co-Head of Global & Regional Bonds.
The fund will invest in global government bonds using a fundamental framework to determine an issuer’s ability and willingness to honour its debt obligations.
In adopting such an approach, the fund will make no distinction between developed and emerging market sovereign borrowers, offering government bond investors a potentially better way to mitigate risk and enhance return.
The fund is an alternative to bond strategies that rely upon traditional market-capitalisation weighted fixed income benchmarks, indices which suffer from a number of structural flaws.
A conventional debt-weighted index forces investors to buy the bonds of sovereigns that borrow the most, irrespective of whether that debt burden is sustainable over the long term. It also limits currency diversification and restricts investors’ ability to capitalise on the rapid economic and capital market expansion being seen across the developing world.
Sébastien Eisinger, Head of Fixed Income, said “as an alternative or as a substitute to traditional investing, investors should start by analysing the fundamentals. Only then will they be able to reduce the risks and maximise the opportunities that are emerging in this period of rapid change for the world economy.”
The fund was launched on the 31st January in Luxembourg. The fund is currently registered in Luxembourg, Singapore, Austria, Germany, Portugal, France, Great Britain, Liechtenstein, Sweden and the Netherlands.
