Legg Mason subsidiary Western Asset has launched two flexible fixed income funds with some protection from principal losses.
Legg Mason Western Asset Multi-Asset Credit fund, managed by Christopher Orndorff, seeks to target income from a portfolio of global high income securities.
Mr Orndorff, who is based in Western Asset’s office in California, has run the strategy since October 2010.
He invests predominantly in investment grade and high-yield credit and emerging market debt, as well as bank loans, structured securities, inflation-linked bonds and government bonds.
The fund, launched on 31 December with assets of more than £100m, also seeks to minimise the downside risk by employing a range of hedging strategies.
The manager is seeking returns with a volatility budget of 5 to 7 per cent by combining a globally-diversified portfolio with tail risk protection.
Western Asset has also launched the Legg Mason Western Asset Global Total Return Investment Grade Bond fund, managed by a London-based team headed by Gordon Brown and Andrew Cormack.
The Multi-Asset Credit fund has been running as a strategy since 2010 so they have brought that to the retail market now.It seeks to maximise total return, while maintaining a focus on liquidity and preservation of capital, with volatility expected to remain at less than 6 per cent.
Launched at a time when the traditional global fixed income benchmark – heavily weighted to US, Japanese and European government bonds – is close to an all-time low yield, the fund seeks to maximise returns from investment-grade rated bonds and currencies by combining a variety of global macro strategies with selected credit and other spread sector investments.
Darius McDermott, managing director at Chelsea Financial Services, said: “Western Asset is a subsidiary of Legg Mason. This is their big fixed-income subsidiary.
“It looks like a broadening of their product range. The Multi-Asset Credit fund has been running as a strategy since 2010 so they have brought that to the retail market now.
“The Total Return Investment Grade fund focuses on quality and liquidity with a low volatility. It appears this type of financial investment product is popular at the moment and they have a capacity to bring it to market.”
