Jupiter has launched a new Global Monthly Income Bond Fund (GMIB) across the UK, European, US Offshore, and Latin American markets.
GMIB combines investment in high-quality, safer bonds with high-risk, high-yield credit, all with moderate duration. Through this combination, GMIB aims to deliver a consistent income-stream without substantial alterations in value during periods of elevated market volatility.
To this end, the blended average credit rating of the Fund will typically sit in investment grade territory, with foreign currency exposure hedged back to the base currency, minimising the potential impact of currency swings on returns.
See also: Yield shield: Three asset allocators give their fixed income picks
The fund will be measured against a custom benchmark based on shorter-dated investment grade and high-yield bonds issued by companies in developed markets. This benchmark provides a guide for all decisions taken about credit risk and interest rate movement sensitivity.
Hilary Blandy, who has experience running a similar strategy – Jupiter’s UK-oriented Monthly Income Bond (MIB) – has been appointed to manage the GMIB. She will actively build a portfolio of 100-150 issuers.
Blandy said: “Since the pandemic, inflation has been stubborn, political risk has been high and government bond markets have been more volatile. This has been challenging for many traditional flexible bond funds, but the upside is that bonds are now paying higher yields. We believe that funds like ours, which can potentially earn a healthy yield for taking only moderate interest rate and credit risk, are better suited to this new market environment.”
