Legg Mason is launching two flexible fixed income funds to be managed by its subsidiary Western Asset Management.
The Multi-Asset Credit fund, which targets global high-income securities,will be managed by Christopher Orndorff from Western’s California office.
The fund already has £100m in assets and will also use some hedging strategies to protect investors in the event of credit market sell-off.
The second fund, the Asset Global Total Return Investment Grade Bond fund, will be managed by a London-based team led by Gordon Brown and Andrew Cormack.
The fund, which will invest in both developed and emerging markets high-rated bonds, aims to maximise returns from investment-grade rated bonds and currencies.
Legg Mason head of UK sales Adam Gent says: “Fixed income investors find themselves at a crossroads in 2016, with the recent rate rise in the US and the potential for further action from some other central banks globally, creating both opportunities and risks.
“The Western Asset Multi-Asset Credit fund has been launched with this very firmly in mind, seeking to offer investors a flexible approach for their fixed income exposure, which seeks to protect capital but still offer an attractive yield in a world where rates will remain low for some time to come.”
“For those investors who are more focused on achieving an attractive total return, the Legg Mason Western Asset Global Total Return Investment Grade Bond fund has a focus on higher quality fixed income sectors and uses its unconstrained mandate to exploit opportunities to generate returns.”
The investment grade fund will also have exposure to foreign currencies, with up to 25 per cent in unhedged non-US dollar assets or currencies and will use derivatives “where appropriate”, the firm says.