Pioneer launches global linkers fund
Pioneer Investments has launched a strategy that will buy low duration inflation-linked government bonds for a fund that it says will provide succour against the risk of unexpected inflation.
The firm argues that investors should not underestimate the effect that inflation can have over the long term, and that inflation protection should be in place through the full economic cycle.
The Global Inflation-Linked Short Term strategy will focus on government linkers with an age between 1-5 years.
The strategy will be managed by lead portfolio managers Cosimo Marasciulo, head of European Government Bonds and Semin Soher, senior portfolio manager. They will use Pioneer’s Fixed Income Alpha Strategy Matrix, which looks to take small amounts of risk across many uncorrelated positions.
Marasciulo (pictured) said: “’Often, the discussion about inflation risk only starts after it is already a problem and inflation hedges are expensive. Current market conditions can offer an attractive opportunity to start building or increasing an inflation protection position, as inflation protection is still relatively cheap. In our opinion, investors can benefit from early entry at the bottom of the long-term inflation cycle.”
“Investing in shorter duration inflation-linked bonds that closely track inflation may provide further protection as they display less interest rate risk than longer duration bonds. Furthermore, the global approach of this strategy may reduce country-specific risks and enhance real returns leveraging on divergent inflation, real yields and monetary policies expectations.”
Currency risk is addressed by offering hedged share classes in all major currencies.