Fund manager Neuberger Berman has launched the Corporate Hybrid Fund, looking for fixed interest securities with equity-like characteristics.
The fund manager claimed this market offered access to investment-grade names while earning high yield market-like returns.
New issuance of hybrids of £16.36bn to £19.64bn a year for the foreseeable future was forecast by Neuberger Berman.
The firm claims to have been involved in 60 per cent of all corporate hybrid primary market deals since January 2014, as well as managing around £326.85m in corporate hybrid mandates.
Key features:
■ Sub-fund of the Neuberger Berman Investment Funds Irish-Domiciled Ucits fund umbrella
■ Launched on 19 November
■ Initial seed capital of £13.74m
■ AMC 0.6 per cent
Adviser View
Juliet Schooling Latter, research director at London-based Chelsea Financial Services, said: “We, like many others, are wary of the bond market at the moment. The major concern centres on liquidity in that market. Also, there is the problem that with a lot of end investors being hungry for yield, higher-yielding funds will tend to be attractive.
“But I think that sometimes the correlation between higher yield and higher risk is not understood. We tend to favour funds in the strategic bond sector where investment is across a wider spread of fixed interest assets.”
