Called the Neuberger Berman Global Opportunistic Bond Fund, the investment product targets risk-adjusted returns through investment in a diversified mix of fixed rate and floating rate debt securities across sectors, under varying market environments.
The fund will be managed by co-managed by Andrew Johnson, head of global investment grade fixed income, Jon Jonsson, senior portfolio manager global fixed income, Ugo Lancioni, head of currency management, and Thanos Bardas, head of rates.
They will be supported by Neuberger Berman’s 129-strong global fixed income team.
The managers will shift allocations in response to changing market conditions with an aim of exploiting market mispricing across a broad global opportunity set, the investment manager said.
The investment strategy mirrors Neuberger Berman’s fixed income team which has been running in segregated accounts since October 2012 and has delivered an annualised 4.6 per cent to 31 December 2016, according to the firm.
Dik van Lomwel, head of EMEA and Latin America, said: “Flexible fixed income offerings with the ability to invest in a wide-range of assets have increased in importance in recent years, as investors continue to face an uncertain and fast-moving economic environment with many traditional fixed-income assets offering low to zero yields.”
Provider view
Mr Jonsson said: “We anticipate periods of heightened volatility for world bond markets throughout 2017 so believe it will be a year where it will be necessary to alter strategy several times on changing policy and economic signals.
"US treasury yields have already risen steeply on heightened inflation fears and may have further to go as President-elect Donald Trump’s policies become reality. In the US, our portfolio seeks a diversified spread exposure, with an emphasis on the US consumer through non-agency RMBS, reflecting comfort with the underlying fundamentals, and also a mix of high yield and bank loans on solid US growth, stronger corporate profits, and the likely pro-growth policy.
“In Europe, there are growing political concerns surrounding the forthcoming elections, while there are question marks over the durability of the ECB’s bond-buying program.”
Adviser view
Darren Cooke, chartered financial planner at Derbyshire based Red Circle Financial Planning, said: “At the moment, creating true diversification through stocks and bonds is difficult because there have been large correlations between the two. Without looking at some of the more esoteric investments, it is difficult to get true diversification, but as an IFA, I feel unqualified to offer advice on some of these areas because they require specialist knowledge I simply do not possess.
"There are a number of funds that have sought to diversify their portfolio through investment in aircraft leasing, but even this asset is correlated to rises and falls of markets. I do not think that there are many factors that provide negative correlation. Many funds have invested in different assets in different markets to soften the blow of the absence of true diversification.
Charges
Annual management charge of 0.8 per cent with £1,000 minimum investment.
Verdict
A greater correlation between stocks and shares and bonds, the traditional diversifier has created challenges for investors seeking to diversify their portfolio. Investors should bear in mind that some of the esoteric diversification solutions are more expensive and require a greater risk appetite compared to high grade bond investments.
