Fund manager Payden & Rygel has launched an investment grade corporate bond fund that seeks to outperform the Bloomberg Global Aggregate Corporate Index.
Payden Global Investment Grade Corporate Bond Fund is seeded with $50 million and has evolved from strategies first applied by Payden to global multi-sector portfolios and offered in the US since 2012.
The firm said the new fund was launched in response to institutional investors’ requirements to lock yield into their fixed income portfolios at a time when some leading central banks are reducing interest rates, which effects bond yields.
“The fund is well placed to enable investors to take advantage of the higher yields currently available across the global spectrum of investment grade bonds with a specific focus on enhancing value through active management to generate superior risk-adjusted returns,” said Frasat Shah, senior vice president.
Positions in the fund reflect Payden’s top-down macroeconomic views with an emphasis on generating alpha through bottom-up credit selection, Shah added. The fund is constructed so that no single position drives performance.
“We aim to identify securities that have characteristics that we believe are mispriced and that offer superior risk adjusted return potential. Examples include opportunities in the primary market, fallen angels, relative value across the capital structure, for example, subordinated debt, secured bonds, floating rate bonds, etc, ” said Shah.
The fund is able to invest in sectors such as high yield, emerging markets or securitised debt. Active positions in the fund are diversified to limit “idiosyncratic issuer-specific risks”.
The fund is described as Article 8 under the EU’s Sustainable Finance Disclosure Regulation and will be offered in US dollar, pound sterling and euro share classes. New currency share classes will be added in response to investor requirements.
