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Bond fund rockets to €3.3bn in assets three months after launch

Bond fund rockets to €3.3bn in assets three months after launch

A target-dated bond fund launched for Credit Suisse’s Singapore-based bond team has rocketed to €3.33 billion in assets under management after having only launched in May.

The CS Nova (Lux) Fixed Maturity Bond Fund 2019 was launched as a Luxembourg-domiciled fund to target US dollar-denominated corporate and quasi-sovereign dated debt with a final maturity up to 20 December 2019.

This approach, which is overseen by Citywire A-rated Adrian Chee and Lei Zhu, has proven hugely popular among investors, with a report by research consultancy Cerulli indicating it was the biggest-selling bond fund in its June reporting.

It topped the long-term mutual bond fund bond table ahead of more established funds, such as the Muzinich Enhanced Yield Short-Term fund, the AllianceBernstein – American Income Portfolio and the M&G Optimal Income fund.

With low rates and low or even negative-yielding debt in bond markets, investors appear to be clamouring for high-yielding, shorter-dated strategies.

Credit Suisse said the fund was particularly well-received in the Asia Pacific region, with demand from across a broad spectrum of investors, covering UHNW, private banks, family offices and institutionals.

The fund was designed to essentially hard close in September, given its target-dated nature, but this action was taken in mid-June following the surprisingly large inflows to protect the investment process.

In a statement to Citywire Selector, Gebhard Giselbrecht, head of asset management Singapore, Credit Suisse, said: ‘In my view the product was able to raise substantial assets due to the strong, demonstrated investment track record and credibility of our fixed income team in Singapore and the attractive product features which have “hit a nerve” with investors.’

A spokesperson for Credit Suisse said the huge levels of demand means the fund will now form the first part of a series, although further details could not be revealed at this time.

Fervour for a short-dated bond fund was previously seen in April 2014 when Oslo-based group’s DNB AM Kort Obligasjon 2 accrued €3.2 billion in assets over the first quarter of 2014.

The Citywire-rated duo Zhu and Chee oversee two other funds at the Swiss asset manager. These are the CS (Lux) Asia Corporate Bond and the CS (Lux) Asia Local Currency Bond fund.

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