EdenTree Investment Management has launched a short-dated bond fund as it builds out its fixed income offering.
Managed by David Katimbo-Mugwanya and Chris Hiorns, the Amity Short-Dated Bond fund sits alongside the £112m Amity Sterling Bond fund, which launched in 2008.
The new SRI-focused fund aims to generate income, preserve capital and mitigate interest rate risk through a portfolio of sterling-denominated short duration corporate and government bonds.
Robin Hepworth, CIO at EdenTree Investment Management, says: “The launch of this fund gives our investors greater flexibility as they determine their credit allocations in a rising rate environment.”
Katimbo-Mugwanya adds: “Investors are not getting any yield from cash and inflation is actually diminishing their purchasing power. By investing in high-quality, short-dated bonds, investors can gain exposure to the pickup from credit spreads, and therefore a higher yield, without building material exposure to duration.
“We believe duration risk is not adequately compensated by the market in what is a very extended cycle – particularly as investors become increasingly concerned by suppressed volatility. It is time for investors to build a defence.”
Over one year the EdenTree Amity Sterling Bond fund has returned 4.8 per cent against the 3.5 per cent average of the IA Sterling Bond fund sector, according to FE data.