Standard Life Investments launches Short Duration Credit Fund
09 January 2014
Global asset manager, Standard Life Investments today announced that it has enhanced its corporate bond offering with the launch of the Short Duration Credit Fund. The Fund, which is designed to meet investor demand for credit products with reduced exposure to interest rate risk, complements the wide spectrum of fixed income funds already offered by the fund manager.
The Fund derives from the conversion of the Standard Life Investments’ Select Income Fund which took place on 8 January 2014. Shareholders in the then Select Income Fund voted unanimously* in favour of the changes at an EGM held on 18 December 2013.
The Fund has been renamed to reflect the change to its investment strategy which will see the duration inherent in the corporate bonds it holds reduced through the use of derivatives. Its benchmark has changed from the IMA Sterling Corporate Bond peer group average to a custom-hedged corporate bond index, but the Fund continues to have access to a wide universe of corporate bonds including the option of investing a proportion of the portfolio in high yield bonds which provide a higher yield and naturally shorter duration.
Daniel McKernan**, who joined Standard Life Investments as Head of Sterling Investment Grade Credit in September 2013 and assumed management of the Fund in December 2013, said:
“Standard Life Investments regularly reviews its product offerings and is wholly committed to providing investment solutions that meet investors’ needs. We continue to see value in credit spreads, but recognise that some investors are increasingly concerned about the negative impact that rising rates could have on the performance of corporate bonds. The Short Duration Credit Fund enhances the choice of fixed income funds we have available to retail investors and provides investors access to our credit selection expertise, but with materially less exposure to changes in interest rates.”
Standard Life Investments is a leading Fixed Income manager in the UK and globally with over £65.5bn under management in the asset class***. The credit investment platform has a 34 strong team with a proven track record. The team manage a wide range of fixed income mutual funds including the Strategic Bond, AAA Income; Corporate Bond; Global Index Linked Bond; Ethical Corporate Bond; UK Gilt and the Higher Income funds.
* 100% of the votes cast at the EGM were in favour of the proposal for the conversion to go ahead.
** Daniel McKernan has over 20 years’ investment management experience as a fixed income fund manager. He joined Standard Life Investments in September 2013 as Head of Sterling Investment Grade Credit. Prior to that he worked as Head of European and Sterling credit at SWIP from 2011 and for five years at Blackrock where he was Director of Fixed Income and a senior Credit Portfolio Manager. Daniel joined Blackrock in 2005 from Aegon Asset Management where he was Head of Credit. Prior to that he was a Credit Portfolio Manager at Resolution for three years. He began his career at Norwich Union as a Graduate Trainee on the gilt desk before moving onto Credit, where he became a Credit Portfolio Manager.
*** As at 30/09/2013