Insight Investment has launched the Insight Buy and Maintain Bond fund to be managed by Adam Mossakowski.
The fund aims to offer investors exposure to a diversified range of global corporate bonds while limit the downside effects of benchmark tracking strategies. Mossakowski will also avoid what he believes to be unsuitable instrument types altogether, for example Tier 1 bank debt.
According to Insight the “buy” in the title reflects the aim of finding credit exposure that offers the best long-term investment fundamentals.
The “maintain” element looks to avoid loss from default or deterioration in credit quality, while at the same time using coupon flow and secondary turnover to continually refresh the portfolio.
Mossakowski says: “Insight’s Buy and Maintain strategy offers credit exposure without the drawback of being benchmarked to market capitalisation-weighted bond indices. Following such indices can result in unintended risks for investors.
“For example, at the height of the financial crisis the iBoxx Sterling Non-Gilt Index had a 40 per cent allocation to financials. Market capitalisation weighted bond indices expose investors to the biggest issuers of debt. These may also be the most leveraged and indebted companies.”