Union Investment has launched its first fund for subordinated bonds, the UniInstitutional Euro Subordinated Bonds.
Its investments have an average rating of at least investment grade (BBB-) and virtually all currency risk is hedged.
The investment universe also comprises interest-bearing securities like corporate bonds and covered bonds, but the exposure to high yield bonds is capped at 20% of the portfolio.
Stefan Sauerschell, the manager, says: “By investing in the bonds of more than 60 issuers in various sectors and regions, the fund mitigates the risks attaching to individual securities.”
The fund is domiciled in Luxembourg.
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