Swiss private bank Union Bancaire Privée (UBP) has added a high-income fund to its fixed income range, targeting high-income bonds and subordinated corporate and financial debt.
UBAM – Strategic Income will aim to combine high-income returns with a strong risk profile based on BB-rated assets. It will also include investment in securitised credit, such as collateralised loan obligations in its portfolio.
The fund aims to achieve returns of 7% a year over the investment cycle and is available to investors in most major European markets.
Nicolas Faller, co-CEO of asset management at UBP, said the fund was designed to take advantage of the current macro-economic environment and “seize the opportunities recently created across the asset class”.
Philippe Gräub, lead manager for the new strategy, said over a long investment horizon, BB-rated bonds had outperformed BBB-rated bonds without any significant difference in volatility, stating this was due to technical issues and not fundamental factors.
“We are convinced that investing in this area of credit markets and diversifying broadly across segments, sectors and issuers can deliver high income to investors,” Gräub said.
Gräub will be supported by Thibault Colle and Bernard McGrath, portfolio managers within UBP’s Global and Absolute Return Fixed Income team. The 14-strong team already manages US$13 billion (£10.2 billion) of assets worldwide.
The scale of the team will mean each segment of the market will have at least one segment expert, and weightings across segments will be decided on a relative-value basis. Specific asset allocations will be based on an analysis of fundamentals.
The full list of countries in which UBAM – Strategic Income is available to investors includes Austria, Belgium, Finland, France, Germany, Italy, Luxembourg, the Netherlands, Norway, Portugal, Singapore, Spain, Sweden, Switzerland and the United Kingdom.
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