The fund was launched as an Irish qualified investor fund (QIF) more than three years ago, and around £200m of its assets will move to the Ucits fund.
The firm claims the short-dated strategy has the potential to provide investors with access to more attractive risk-adjusted returns with less volatility than traditional high yield bonds.
The fund will focus on short-dated securities from issuers that may be judged sub-investment grade, but the default risk is deemed much lower by the firm due to its bottom-up credit approach. Holdings have an average expected maturity of 1.1 years as of mid-June.
Just under half, 45%, of assets have a hard maturity date by year-end 2015 and the remainder are callable assets with high coupons or story specific events the firm believes will lead to early refinancing.
Ulrich Gerhard, manager of the Insight Short-Dated High Yield Bond Fund, said: “The biggest protection against the credit risk of holding high yield is short duration. For a fund manager like Insight with bottom-up analytical skills, the predictability of cash flows and income generated by a business are easier to assess over a shorter time period. Buying short-dated high yield bonds can also enable investors to capture structural inefficiencies in credit markets.”
Earlier in the year Insight, which is owned by BNY Mellon, bought Pareto Investment Management. The combined group operates as a fully autonomous investment manager within BNY Mellon’s boutique asset management structure.
