RLAM launches Royal London Global Index Linked Fund
Tuesday 9th February 2010
By Mike Jones
Royal London Asset Management (RLAM) has launched the Royal London Global Index Linked Fund to help investors hedge against potential increases in global inflation and target more attractive yields outside the UK. The Fund is managed by George Henderson with the support of Paul Rayner and Craig Inches in the RLAM government bond team.
The Fund seeks to provide annualised returns in excess of +1.0% against its benchmark, the Barclays World Government Inflation-Linked Bond Index (hedged to GBP), over rolling three-year periods, gross of fees. It will invest in a portfolio of between 30 and 60 holdings, predominantly in global index-linked bonds. The Fund will have the flexibility to invest up to 30% in both conventional government bonds and investment grade corporate debt.
Fund Manager George Henderson said: "The unprecedented levels of liquidity pumped into markets coupled with undefined exit strategies and a lack of familiarity with new monetary policy tools create an uncertain outlook for global inflation. Index linked bonds provide a very useful hedge against potentially higher inflation and we are seeing compelling opportunities in global index-linked bonds which can offer over 50 basis points of increased yield over their UK equivalents."
Susan Spiller, Head of Marketing at RLAM said: "Inflation expectations have fluctuated significantly over recent years, with investors facing projections ranging from deflation to high inflation scenarios. RLAM is committed to offering the kinds of products that help our clients meet their investment objectives. The launch of the Royal London Global Index Linked Fund reflects client concerns over higher long-term global inflation and offers a useful diversifying tool in a balanced investment portfolio."
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