Insight Investment is making an intermediary push as advisers struggle with what to do with fixed income investments as the 30-year bond bull market nears its end.
Fergus McCarthy, head of UK intermediary distribution at BNY Mellon, the parent company of the £542bn fixed income specialist, says investors the team is making a push on the Absolute Return Bond fund.
McCarthy says the fund is appropriate for many advisers who are uncertain about how to position themselves for the end of the bond bull market.
“Fundamentally, from an Insight point of view, the Absolute Return Bond fund they run is effectively the best ideas of their whole suite. If you wanted a shop window for Insight that’s the Absolute Return Bond fund,” McCarthy says.
The £2bn fund has returned 13.7 per cent over the last year compared to 12.4 per cent in the Absolute Return sector, according to FE data.
Without the absolute return fund McCarthy says the predicted end of the bond bull market could be a strange time to make a fixed income push.
Inflation is also a concern for a lot of clients McCarthy’s team talks to.
“There’s one major player in that sector in the inflation-linked corporate bond world and we think that’s ripe for some competition.”
McCarthy says pushing Insight Investments products into the intermediary space has been on his agenda since he joined the firm in 2014. Insight is already the second largest manager of pension assets in the UK.
But he lists the departure of Jason Pidcock, who moved to Jupiter in 2015 to head up an Asian income strategy, among the events that have sidetracked the move over the last couple of years. “That took us the best part of six months as a team to deal with,” McCarthy says.
2016 then turned out to be one of the worst for the industry in 30 years, McCarthy explains. “There was cash coming out, people sitting on the sidelines, then we had Brexit, then we had Trump. The whole year was just a complete oddity.”
The Global Credit fund is one that the intermediary team is hoping will attract wholesale flows and McCarthy says they’ve been doing a lot of education with advisers to show them the value of shifting away from their home bias.
The fund was one of two launches last year alongside the Short Duration High Yield fund.