Aegon to launch global bond fund for Roberts

Aegon Asset Management is to launch an Investment Grade Bond fund on June 1, 2006. Managed by David Roberts, the stockpicking fund will invest in investment-grade bonds globally.

Roberts will be supported by a 14-strong team in Britain, as well as Aegon’s network of 50 to 60 fixed-income professionals around the world. He will be able to invest in any bond rated as “investment grade” by the major rating agencies.

The fund will be actively managed, with a concentrated portfolio of 40-80 stocks, and will sit in the IMA UK Corporate Bond sector.

At least 80% of the fund will be hedged back to sterling, while swaps will be used to manage overseas interest rate risk. Some 20% of the fund can be invested in high-yield debt, and Roberts can also invest in sovereign debt and money-market instruments.

Like Aegon’s other bond funds, the Investment Grade fund will target six drivers of performance: asset allocation, duration, interest rate positioning, stock selection and yield curve positioning.

“We have already proved we can deliver for clients using that particular model, through our Global Bond and High Yield funds,” says Roberts.

However, feedback from some clients indicated that high yield and emerging markets do not fit in with everyone’s risk profile. This is partly why the Investment Grade fund is being set up, Roberts says. “In this fund we will use our global expertise in a lower-risk way.

“We have locally managed portfolios in Continental Europe and North America and have built a significant amount of expertise and a strong track record,” he says.

The flexibility to buy bonds in currencies other than sterling is also a benefit, says Roberts. “The breadth and range of bonds we can buy is far wider because we can buy in dollars and euros, not just sterling,” he says.

The fund will launch with a 1.5% discount off the normal initial charge of 4.5%, until July 31, 2006. The annual management fee will be 1.25%, while the minimum investment will be 500.