Ignis plans absolute return government bond fund

Asset manager Ignis plans to launch a retail absolute return government bond fund at the end of March.

The launch follows 12 months of consultation with clients to gauge their appetite for that type of fund, said the firm, with 87% of IFAs saying they were interested.

Ignis will use the same strategy as for its institutional clients, following its flagship rates process. Unlike other bond funds, it splits discount yield curves into constituent forward rates instead of taking an average.

Head of Rates Russ Oxley and chief economist Stuart Thomson (pictured above) will manage the Luxembourg-domiciled fund, which falls under a SICAV structure and is UCITS III compliant.

Though it primarily invests in government bonds, the fund will also take long and short positions in money market instruments and derivatives.

It will limit foreign currency exposure to 25%.

It claims to be low votalitility, targeting cash plus performance in all market conditions.

The annual management charge is 1%, with a 10% fee on performance above the cash hurdle rate measured by the Sterling Overnight Index Average (SONIA).

A minimum investment of £1,000 in A-class shares is required, or £1m in I-class.

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