Allianz Global Investors has launched an absolute return fund in a bid to expand its alternatives offering.
The Luxembourg-domiciled Allianz Structured Return fund, to be run by US-based Stephen Bond-Nelson and Greg Tournant, will seek single-digit returns and a "bond-like risk" using derivatives.
The fund will use equity index call and put options, which Mr Bond-Nelson said would give the vehicle a risk profile comparative to a fixed income strategy, but without associated credit, duration or interest rate risk. Its core position would call options on the S&P 500 index.
The fund will have an ongoing charges figure of 1.6 per cent for its euro-denominated retail share class.
Deborah Zurkow, head of alternatives at the asset manager, said: "The strategy aims to deliver what clients need most: reliable outcomes for taking bond-like risk.
"In a period marked by sustained low interest rates and market volatility, the ability to generate positive returns from largely uncorrelated risk factors will be a key driver for further growth of alternatives strategies.”