Absolute return corporate bond fund opens in UCITS format to external investment
with both income and accumulation share classes for retail and institutional investors
Altana Wealth (“Altana”), the investment management group founded by Lee Robinson, announces that it has launched a UCITS version of its’ absolute return Altana Corporate Bonds Fund (‘ACBF’), following institutional demand and strong performance with a gross return since inception in 2013 of +13.34%.
The UCITS fund, which is unconstrained, is now open to outside investment and launched with €15 million. Altana is offering both income and accumulation share classes for both retail – with a 1.25% management fee and institutional – with a 0.75% management fee. With low annualised volatility at less than 4%, the UCITS will attract a SRRI risk rating of just 3. The fund has UK reporting status and offers an additional RDR-compliant ‘clean’ share class for UK investors.
Portfolio manager Stevan Bajic will manage the fund, whose aim is to generate positive returns in all market phases by investing in a globally diversified corporate bond portfolio with regular income from short-dated and quality household-name corporate bonds. The fund sources attractive bond investment opportunities in all major markets and in both primary and secondary, by analysing the credit quality of corporates with strong defendable business structures and then models the reward for potential changes. Fund performance remains strong at +3.84% (year to date to end April 2014), following on from last year’s positive returns of 9.5% (gross returns).
The funds’ distinctive edge in analysing credits is that as a final check on the suitability of the bond, it conducts ‘forward credit rate’ analysis. This process ensures that the fund is rewarded commensurately with the amount of risk it is taking, particularly when the duration of the bond goes beyond one year. Beyond this one year mark, the visibility of the health of the corporate diminishes and therefore the risks increase. It is exactly this effect for which the fund aims to be correctly rewarded.
Stevan is a Lipper award winning manager with a proven track record of over 5 years as a Fixed Income Fund Manager, most recently with Bank Sarasin prior to joining Altana. He commented: “Credit investors are facing many challenges in the current environment of stretched valuations; where to source decent returns while being fairly compensated for the risks, how to avoid the liquidity trap and how to deal with the end of QE and the threat of rising interest rates? With a diverse approach being wary of the potential risks as well as being patient to exploit bouts of weaknesses investors can still achieve above average returns.”
Altana Wealth’s primary aim is to counter the destructive effects of inflation by delivering real inflation-adjusted returns.
Lee Robinson, founder and CIO commented: “Stevan’s outstanding performance and innovative approach to portfolio construction has already solicited high interest from a number of European institutional investors, wealth managers and family offices looking for a UCITS version of this fund.
He added: “Continued volatile economic conditions mean that investors are desperately trying to find alternative sources of decent stable income for their fixed income portfolios, without compromising on risk and with some form of protection against rising interest rates. The low risk, low volatility and unconstrained structure of this fund is well suited to providing this especially compared to the returns and risks from holding sovereign bonds or bank deposits. We are confident that with Stevan’s impressive experience and track record, investors will be attracted by the high yields and robust returns.”