Last updated: 23:28 / Tuesday, 26 July 2016
Retail and Institutional

BMO Global Asset Management Launches Global Absolute Return Bond Fund

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BMO Global Asset Management Launches Global Absolute Return Bond Fund
  • Offering for retail and institutional investors looking for attractive levels of potential return in today’s low-yield environment
  • The fund is a UCITS SICAV domiciled in Luxembourg and the Financial Conduct Authority recognizes it. It is a liquid investment strategy with daily dealing available
  • Unconstrained by a benchmark or particular maturity, credit rating band, sector or geography
  • It has strict risk limits, and a long bias, combined with the ability to go short rates and credit
  • The lead managers are Keith Patton and Ian Robinson

BMO Global Asset Management has launched the BMO Global Absolute Return Bond fund further strengthening its absolute return offering for retail and institutional investors looking for attractive levels of potential return in today’s low-yield environment. The fund is a UCITS SICAV domiciled in Luxembourg and the Financial Conduct Authority recognizes it. It is a liquid investment strategy with daily dealing available.

BMO Global Absolute Return Bond fund’s investment approach is unconstrained by a benchmark or particular maturity, credit rating band, sector or geography, but has strict risk limits. A long bias, combined with the ability to go short rates and credit, gives greater flexibility and downside protection.

Investment in global credit is combined with thematic overlays within the portfolio to provide diverse sources of return within a disciplined risk management framework. The core credit portfolio is a ‘buy and maintain’ strategy which focuses on exploiting persistent anomalies in investment grade and high yield securities and is well diversified with over 100 issuers to reduce risk. Thematic overlays contribute to return and aid diversification through active management of credit, interest rate and currency risk. Disciplined risk management is used across the portfolio to calibrate risk up or down as necessary.

BMO Global Asset Management’s Fixed Income team in London manages the fund. The lead managers are Keith Patton and Ian Robinson. Strategic decisions across each of the underlying strategies are delegated to experts in global credit, currency, rates and risk management.

“The fund aims to deliver stable returns whilst having a different profile to that of global bond markets,” said Keith Patton, co-manager of the BMO Global Absolute Return Bond fund. “The combination of multiple strategies, working together, provides investors with the opportunity for a smoother overall return profile over time relative to traditional investments. In addition, the unconstrained approach allows for greater diversification across strategies and for the investment teams to target areas where they have the greatest conviction.”

Ian Robinson, co-manager of the BMO Global Absolute Return Bond fund, added: "The focus on shorter dated credit securities reduces the cyclicality generally associated with longer maturity bonds.”

The launch is part of the continued drive to build BMO Global Asset Management’s offering to, and coverage of, wholesale and institutional clients across EMEA over the past year.

“We are seeing huge demand from our clients for absolute return strategies, as they look for solutions that can provide greater certainty of outcome and positive returns in a challenging market environment,” said Mandy Mannix, Head of Client Management, BMO Global Asset Management (EMEA).

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