Legg Mason is launching its Global Blue Chip Bond vehicle to be managed by its affiliate Western Asset Management.
As revealed by Investment Week in April, the Dublin-domiciled vehicle will invest in A-rated plus credit issues and with a 10% cap on financial exposure, the strategy will take advantage of historically high spreads in yields and will aim to deliver an annual yield of 5%-6%.
The strategy will be benchmarked to the Merrill Lynch US Treasuries 1-10 Year Index and is aimed at those investors wishing to participate in the corporate bond market, but without the inherent risk of investing in financial sector or emerging market debt.
While it will not have explicit country restrictions, the fund will be predominantly invested in developed economy debt including issues from companies in the UK, US, Canada, the eurozone, Japan and Australia, and will not be limited to any sector.
Fund co-manager Dipankar Shewaram, says: "Spreads have reached historic highs, which reflect both the illiquidity in credit markets and investors' extremely pessimistic outlook for the global economy and corporate defaults.
"There is a substantial amount of incremental yield that is reflective of neither market technicals nor credit fundamentals."
