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Vontobel bolsters bond fund range with absolute return launch

Vontobel bolsters bond fund range with absolute return launch

Vontobel Asset Management has broadened its fixed income funds range with the launch of another absolute return bond fund, Citywire Global can reveal.

The Vontobel Fund Absolute Return Bond Dynamic strategy, which is Luxembourg-domiciled, was formally launched on September 30.

It is managed by Paul Nicholson who also runs the existing Vontobel Fund Absolute Return Bond fund, having taken over from Massimiliano Gnesi in June 2013.

In the new approach, Nicholson will put an emphasis on risk management given investor demand for stability during a period of uncertainty over rates rises.

The company said it had opted to launch the fund as investors had shown a desire to weather high price fluctuations and low yields on government bonds.

Nicholson will avoid perceived illiquid parts of the market in order to be able to respond to changing market conditions. The fund aims to achieve a risk-adjusted return exceeding the three-month LIBOR by 5%.

Commenting on the launch, Nicholson said: ‘We avoid illiquidity to ensure our flexible approach, whilst deconstructing credit, rates and currency, and making them strategies in their own right. In doing so, we aim to achieve outperformance.’

Speaking to Citywire Global last month, Nicholson said investors must react in a more patient manner during the current bond cycle as many are over-reaching for yield and moving into increasingly illiquid parts of the market.

The launch coincides with increased efforts by the Swiss group to bolster its fixed income unit. This follows Hervé Hanoune being hired from Amundi to oversee the department, Mondher Bettaieb named as head of corporate bonds and Valentina Chen joining from Aviva Investors this year.

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