Columbia Threadneedle launches US IG corporate bond fund
Columbia Threadneedle Investments has added a new US investment grade corporate bond fund to its SICAV range.
The UCITS fund, co-managed by Minneapolis-based portfolio managers Tom Murphy and Tim Doubek, aims to generate a total return from income and capital appreciation by seizing opportunities in the US investment grade corporate bond market, focusing on security selection and industry rotation as the primary sources of value added with a constant focus on downside risk.
The fund mirrors the existing investment grade corporate fixed income strategy managed by the duo for US investors with a strong track record over the last seven years.
The fund’s benchmark is the Barclays US Corporate Investment Grade Index and the fund’s performance target is +100 to 150 bps over the index (gross) over a full market cycle of five to seven years.
Fund managers will follow a bottom-up fundamental research process resulting in a deep understanding of issuer and industry dynamics. Experienced and dedicated portfolio managers and analysts are full partners in the portfolio construction and monitoring process allowing the team’s best ideas to emerge with a constant focus on maximized return and reduced volatility.
“In a low yield environment, exposure to corporate credit can provide an effective way for investors to preserve capital and generate income whilst diversifying their portfolio away from equity markets,” said Gary Collins, head of Wholesale Distribution for EMEA and Latin America at Columbia Threadneedle.
“Given solid fundamental credit insights, a reasonable time horizon, and the ability to withstand short-term volatility, we believe credit opportunities in the US investment grade corporate bond market can be exploited to achieve attractive risk-adjusted returns,” said Tom Murphy, head of Investment Grade Credit and co-manager of the fund.
Columbia Threadneedle manages about $24bn in US investment grade funds, while also operating European and global investment grade corporate bond strategies available through its SICAV range.
Initially registered in Luxembourg, the fund is intended for distribution across other markets (UK, Austria, Belgium, France, Germany, Italy, the Netherlands, Portugal, Singapore, Spain, Switzerland and Sweden) pending regulatory approval in each country.