Standard Life Investments launches short-dated corporate bond fund

Edinburgh-based global asset manager, Standard Life Investments, has launched a new bond fund to address the potential for significant drawdown that an increase in fixed income market volatility could bring.

SLI said its ‘Short-Dated Corporate Bond Fund’ will be an actively managed platform with a diversified portfolio of predominantly sterling-denominated corporate bonds with a maturity of less than five years.

SLI said in a statement: “With core government bond yields at, or close to their lows, investors have become increasingly worried about the price impact that rising interest rates will have on their fixed income allocations.

“By utilising our strong global stock selection process and focusing on shorter-dated corporate securities, the Fund aims to reduce the impact of rising yields, while still targeting a better return and income than similar maturity government bonds.”

The Fund is to be managed by SLI’s head of Sterling investment grade credit Daniel McKernan, and investment director, credit Mark Munro.

It will be available as an OEIC and complements the existing suite of corporate bond funds across the Standard Life Investments OEIC range.

Mr McKernan said: “With macro uncertainty increasing and evidence that we are drawing towards the end of the credit cycle, we would expect to see an increase in volatility in both government and credit markets. While short-dated corporate bonds are not immune to any increase in market volatility, we believe that they offer an excellent risk-adjusted option for investors.”