Principal Investment Management has launched its first fund, a monthly income bond mandate.
The Principal Monthly Income Investment Grade Bond fund will aim to provide income, which can be drawn monthly, alongside capital growth by investing in investment-grade debt securities, corporate bonds and government bonds.
The fund’s net projected annual distribution yield at launch is expected to be above 5%.
Craig Veysey, who has been responsible for directly invested fixed income investments at the discretionary management group since March 2009, will run the fund.
He says: “The investment-grade focus of the fund underpins the fund’s conservative approach within the strategic bond sector and Principal’s commitment to investing in higher-quality securities for its clients.
“We will actively seek strategic opportunities in corporate and government bonds both in the UK and overseas, including emerging markets.”
Veysey adds: “The fund will target a top quartile performance versus the IMA Sterling Strategic Bond sector.”
The fund, which launched on March 1, is expected to have approximately £40m invested at the outset. Principal already manages about £350m of fixed income in client portfolios.
Minimum investment in the fund is £500, which carries an annual management charge of 1%, and an initial charge of 3%.