Aviva Investors today announced the launch of the Aviva Investors - Global Short Duration High Yield Bond Fund in response to growing demand from institutional investors seeking less volatile, consistent income.
A new strategy for Aviva Investors, the fund is an addition to its existing US$257.4bn (£165.7bn) Fixed Income product range. It invests in high yield corporate bonds that have an average maturity of less than five years and are domiciled across the world.
Todd Youngberg, global investment director of fixed income and head of high yield investments, said:
“The challenging economic conditions of the past few years have prompted institutional investors to increasingly reduce risk in their portfolios while trying to maintain strong levels of income. Addressing the duration of bond investments is an important step in this process as it defines both price volatility due to spread movement and interest rate risk investors are taking. Next to the credit risk this is the main concern for bond holders.”
The fund is managed by Aviva Investors’ global high yield team, headed by Todd Youngberg and with assets under management of more than US$4.5bn. Jeremy Hughes, Senior High Yield Portfolio Manager, is the team lead fund manager and draws on the support of five portfolio managers and 26 credit analysts based in the US, UK, Europe and Asia Pacific. The team’s global approach means that it is able to maximise on the number of short duration high yield opportunities and capitalise on the increasing trend towards multi-currency issuance.
Todd Youngberg continued:
“As an asset class, high-yield bonds currently have a substantial yield advantage versus government bonds. This attractive yield level, coupled with the diversification benefits due to its low correlation with other asset classes is encouraging institutional investors to invest. Our global high yield bond fund has recently passed the US$1 billion mark in assets under management and in launching a short duration high yield bond fund we have provided our investors with more choice, especially those concerned about the effect of interest rate changes on their portfolios in a tighter spread environment.”
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