Alliance Bernstein launches short duration high yield fund
Alliance Bernstein has launched a short-duration high yield strategy for European investors seeking greater stability in their fixed income allocations without giving up too much return to achieve this.
The Short Duration High Yield Portfolio from the $402bn asset manager will invest in high-yielding corporate debt securities with an average duration of less than four years.
The fund will target higher quality issuers within the high yield universe – excluding CCC and lower ratings – and employ hedging techniques including protection on individual issuers, or via bond indices or interest-rate options.
It joins other short duration high yield products launched by Axa Investment Managers, Neuberger Berman and America’s Muzinich, among others.
Various fixed income managers have noted recently corporates are now preferable investments to sovereign securities, which are either too risky (peripheral Europe), or have too low yields due to their perceived safety (Bunds, US Treasuries).
Alliance Bernstein portfolio manager Ivan Rudolph-Shabinsky said investors continue to seek higher yields, but “remain concerned about the downside volatility in an uncertain global economic environment”.
He added high yield securities are attractive relative to other fixed income sectors, “especially as the corporate fundamentals of many companies remain strong”.
The high yield team alongside Shabinsky have an average of 14 years’ experience in these markets.
Mirko Böttcher, Alliance Bernstein’s head of European third party distribution, said: “We continue to see strong investor demand for reduced volatility solutions. This new strategy combines the substantial track record of our global high yield fund management team with an innovative approach to lowering the fund’s risk profile.”