Union Bancaire Privée has launched a high income fund as part of its global and absolute return fixed income range.
The UBAM Strategic Income fund will target a high level of income, coupled with a BB-rating risk profile.
Philippe Gräub, head of UBP's global and absolute return fixed income team, said: "Over a long investment horizon, BB-rated bonds have delivered materially higher returns than BBB bonds, despite displaying similar volatility.
"We believe this is due to technical rather than fundamental factors. We are convinced that investing in this area of credit markets and diversifying broadly across segments, sectors and issuers can deliver high income to investors."
The fund will aim to return 7% per year over the investment cycle through allocation to the high-income segments of the global credit markets including high-yield bonds, subordinated corporate and financial debt and securitised credit..
Gräub will be the lead manager, supported by Thibault Colle and Bernard McGrath, portfolio managers within UBP's global and absolute return fixed income team.
Using 14 investment professionals within the team, the strategy attempts to cover all segments of the fixed income market.
For the portfolio allocation, relative-value analysis will be performed on an ongoing basis to decide the weight of each segment, while the selection of individual issues is based on thorough fundamental analysis.
Nicolas Faller, co-CEO of asset management at UBP, said: "This new fund represents another valuable building block to complement UBP's global and absolute return fixed income range.
"Supported by the current macroeconomic backdrop, this solution intends to seize the opportunities recently created across the asset class while meeting our clients' growing demand for innovative high-income solutions".
