The Amity Short-Dated Bond Fund will invest in short duration corporate and government bonds, denominated in sterling, but with a strong ethical bias.
It follows in the footsteps of the Amity Sterling Bond Fund, launched in 2008, and will be managed by David Katimbo-Mugwanya and Chris Hiorns.
The duo will actively manage the fund’s duration, which is expected to average at two years and be no more than three years and apply an ethical screen to exclude businesses and industries which are not considered socially responsible.
Katimbo-Mugwanya (pictured) said now was the time for short-dated exposure.
He said: “Investors are not getting any yield from cash and inflation is actually diminishing their purchasing power. By investing in high-quality, short-dated bonds, investors can gain exposure to the pickup from credit spreads, and therefore a higher yield, without building material exposure to duration.
“We believe duration risk is not adequately compensated by the market in what is a very extended cycle – particularly as investors become increasingly concerned by suppressed volatility. It is time for investors to build a defence.”
Robin Hepworth, CIO at EdenTree Investment Management, said: “The launch of this fund gives our investors greater flexibility as they determine their credit allocations in a rising rate environment.
“Our successful Amity Sterling Bond Fund has shown that we are able to manage credit investments and provide a stable income throughout the market cycle, while keeping environmental, social and governance concerns at the heart of the investment process.”
