Aberdeen Asset Management has launched a sterling short-dated corporate bond fund aiming to attract £100m in the first year.
The fund, which will be managed by the pan-European fixed income team, will target investment grade credit focusing on securities that mature within five years.
Currently the European bond team manages the £1.7bn Corporate Bond fund.
The new fund will limit its exposure to rising yields in fixed income but will remain exposed to short-dated corporate bonds to provide “a reasonable” level of income, says Aberdeen head of pan-European credit Roger Webb.
Webb says: “We are nearing the end of a 30-year bull market in bonds which raises inevitable questions about how this very important asset class within investors’ portfolios should be invested.
“In the near term we expect interest rates to stay low reflecting the low inflation and low growth environment we are in, supported by continuing Central Bank buying of fixed income securities.
“However, into the medium and long term as interest rates revert to a more normal long term level there is a risk of capital erosion that investors could face.”
The fund has a minimum investment of £500 and ongoing charges of 0.69 per cent.