BMO Global Asset Management has responded to investors’ appetite for income with the launch of an absolute return fixed income strategy.
BMO Global Absolute Return Bond will employ an unconstrained approach to comb fixed interest opportunities from across the global debt spectrum.
Despite the fund’s ‘unconstrained’ marketing flag, which allows it to invest in all markets regardless of quality, maturity, sector or region, it will abide by tight risk limits.
This, BMO GAM said, will be achieved by operating a core portfolio of ‘buy and maintain’ investment grade and high yield securities – which spreads risk by using more than 100 issuers – topped with a selection of thematic overlays.
This process will be overseen by Patton and Robinson, although decisions within the underlying credit, currency, rates and risk management strategies will be made by their respective teams of specialists.
‘The combination of multiple strategies, working together, provides investors with the opportunity for a smoother overall return profile over time relative to traditional investments,’ said Patton.
‘In addition, the unconstrained approach allows for greater diversification across strategies and for the investment teams to target areas where they have the greatest conviction.’
Patton added: ‘The focus on shorter-dated credit securities reduces the cyclicality generally associated with longer-maturity bonds. This allows us to be more confident regarding the range of outcomes around the cash plus 3% target.’
BMO Global Absolute Return Bond is a daily-dealing Ucits-qualified Sicav.