Aberdeen launches short dated corporate bond fund

The Aberdeen Sterling Short Dated Corproate Bond Fund is looking to attract over £100 million in the first year. The Fund will invest in investment grade credit focusing on securities that mature within five years.

It will be managed by the Group’s Pan-European fixed income team who also manage the £1.7 billion Aberdeen Corporate Bond Fund.

The team has the ability to allocate up to half the portfolio to non-sterling assets that are then fully hedged back and will be supported by Aberdeen’s global credit-research platform and will follow its credit process which includes the elements of fundamental analysis, relative value and portfolio construction, bound together by risk management.

Roger Webb, Head of Pan-European Credit at Aberdeen, said: “We are nearing the end of a 30 year bull market in bonds which raises inevitable questions about how this very important asset class within investors’ portfolios should be invested. In the near term we expect interest rates to stay low reflecting the low inflation and low growth environment we are in, supported by continuing Central Bank buying of fixed income securities. However, into the medium and long term as interest rates revert to a more normal long term level there is a risk of capital erosion that investors could face.

“This Fund offers the opportunity to limit exposure to rising yields in fixed income securities whilst still remaining exposed to short dated corporate bonds to provide a reasonable level of income in the current environment.”

The Fund has a minimum investment of £500 and Ongoing Charges Figure (OCF) of 0.69 per cent on its A share class and a minmum investment of £500,000 and OCF of 0.39 per cent on its I share class.