Collins Stewart is to launch an absolute return bond fund on 29 October run by chief investment offi...
Collins Stewart is to launch an absolute return bond fund on 29 October run by chief investment officer Jim Goodey.
The co-manager on the portfolio will be Mark Depres and the vehicle, first reported in Investment Week, is structured as a Dublin-based Ucits III product.
The Collins Stewart Total Return Bond fund will principally invest in G10 government issues, with all issues rated A or above. The fund aims to return three-month sterling Libor plus 2% after all fees and expenses. If this is achieved, on a rolling one-year basis, a performance fee of 20% of the excess return will apply.
Mark McPartlin, sales director at the group, said the performance fee will not be levied if the fund has not met this target in previous periods.
"We will have to make good any shortfalls in the previous year and therefore will not take the performance fee," he added.
"We have opted for this structure on the premise that we do not believe we should be paid the same amount irrespective of whether or not we are doing a good job," he added.
Goodey will manage risk when bearish on bond markets by neutralising exposure through the use of derivative strategies. In extreme circumstances, he will hold a 25% short position to profit from falling markets.
The minimum investment is £10,000 and IFAs are offered 0.25% total commission.