Fixed Income  

Fund review: Henderson credit funds

Henderson has announced two new funds to add to its fixed income offering.

The Henderson Horizon Emerging Market Corporate Bond and the Global Corporate Bond funds will be managed by the group’s head of emerging market credit, Steve Drew, and James Briggs, a fixed income fund manager.

The Ucits funds will both be Luxembourg-domiciled and US dollar-denominated. The Emerging Market Corporate Bond fund’s objective aims to deliver a total return in excess of its benchmark, the JP Morgan Corporate Emerging Market Bond Index Broad Diversified. The fund uses a thematic and quantitative filtering process which allows the team to concentrate on bonds they believe offer genuine value.

Article continues after advert

The Global Corporate Bond fund also aims to deliver a total return above the Barclays Global Aggregate Corporate Bond index by investing primarily in investment grade corporate bonds. The group says the combination of conviction-led investing and a blend of macroeconomic analysis and fundamental security selection can allow the fund to exploit any disparities in markets around the world.

Both funds carry a minimum initial investment of £2,500 and an initial 5 per cent charge, while the Emerging Markets Corporate Bond fund has an annual management charge of 1 per cent, the Global Corporate Bond fund has a slightly lower AMC of 0.75 per cent.

www.henderson.com

Comment:

While the fixed income market has been slightly out of favour with investors over the past year, Henderson has a good track record in the asset class, with many top name managers.

The fact these funds are managed by the group’s head of emerging market credit means the management behind the team is as strong as Henderson’s other fixed income funds.

Emerging market corporate bonds in particular could make an interesting choice for investment, given the amount of growth available across the space. The benchmark for the fund covers the world, with a high allocation to China, Hong Kong, Brazil and Mexico, meaning the fund could capitalise on growth in those countries’ markets.

The Global Corporate Bond fund is slightly more straightforward, mainly focused on investment grade corporates, and also utilising macroeconomic analysis as well as conviction-led investing.

The funds’ managers will both have access to a 16-strong credit research team and will be working closely with the interest rates team, so the analysis and data finding within the funds look set to be strong. The funds have a slightly higher than average minimum investment at £2,500, but if they perform well, this should not be the be all and end all of selection.