James Williams, Hedgeweek

Deutsche Asset & Wealth Management ponder UCITS version of recently launched DWS Strategic Equity Long/Short fund … LuxFLAG introduces ESG label for UCITS and AIFMD-compliant funds…

Lord, Abbett & Co LLC ("Lord Abbett"), an independent investment management firm, this week announced that it had launched Passport Portfolios to provide non-US institutions and non-US resident investors with access to select Lord Abbett fixed income investment strategies through a suite of UCITS funds.

The strategies available include:

  • Lord Abbett Short Duration Income Fund
  • Lord Abbett High Yield Fund and
  • Lord Abbett Strategic Income Fund.

The portfolios are listed on the Irish Stock Exchange. Arbour Partners has been appointed to support distribution of the Passport Portfolios in Europe. Founded in 1929, Lord Abbett is now increasing its footprint as a global investment manager, building on its strong product competencies. The firm has approximately USD139bn in AuM with USD92bn in fixed income strategies.
   
Key details of the funds include:
 
·         Lord Abbett Short Duration Income Fund: Designed to focus on sectors that have demonstrated superior return profiles historically, such as investment grade and high yield short duration mortgage, corporate, government and asset backed securities. The fund seeks to provide higher yield than a traditional short duration strategy, but with lower duration than a traditional core bond strategy. It utilizes a strategic yield-based portfolio design and diversification to reduce volatility. The fund is managed by the same investment team, and with the same investment process, as the US-registered Lord Abbett Short Duration Income Fund.
 
·         Lord Abbett Strategic Income Fund: Focused primarily on Baa-rated corporate bonds, the fund looks to identify corporate bond investment opportunities across multiple sectors and uses a diversified blend in the portfolio construction to enhance return and reduce volatility.
 
·         Lord Abbett High Yield Fund: Designed to emphasize asset-rich companies with strong management teams, while seeking investment opportunities across the credit spectrum and applying rigorous risk management.
 
“The launch of these products presents an opportunity for a wide range of investors outside the US, especially in Europe and the Middle East, to access US fixed income markets at a time when we are seeing attractive income opportunities there,” commented Stephen Hillebrecht, Fixed Income Product Strategist at Lord Abbett. “We continue to see demand for yield-based strategies that also limit interest rate exposure, and we feel that our investment-led, investor-focused approach will be well-received. The U.S. corporate and asset-backed fixed income market remains one of the deepest, broadest and most liquid fixed income securities markets in the world and continues to provide income-producing opportunities.”  
 
Investment management group Altana Wealth has announced that it has launched a UCITS version of its absolute return Altana Corporate Bonds Fund, following institutional demand and strong performance; it has generated a gross return of 13.34 per cent since inception in 2013. 
 
The UCITS fund launched with EUR15mn. Altana is offering both income and accumulation share classes for both retail, with a 1.25 per cent management fee and institutional, with a 0.75 per cent management fee. The fund has UK reporting status and offers an additional RDR-compliant 'clean' share class for UK investors.
 
Portfolio manager Stevan Bajic will manage the fund, whose aim is to generate positive returns in all market phases by investing in a globally diversified corporate bond portfolio with regular income from short-dated and quality household-name corporate bonds. 
 
The fund sources attractive bond investment opportunities globally in both primary and secondary markets by first analysing the credit quality of corporates with strong defendable business structures and then modeling the reward for potential changes. Through April 2014 the fund has returned +3.84 per cent after returning +9.5 per cent last year.
 
Bajic was quoted as saying: “Credit investors are facing many challenges in the current environment of stretched valuations; where to source decent returns while being fairly compensated for the risks, how to avoid the liquidity trap and how to deal with the end of QE and the threat of rising interest rates? With a diverse approach being wary of the potential risks as well as being patient to exploit bouts of weaknesses investors can still achieve above average returns.”
 
Lee Robinson, founder and CIO of Altana Wealth added: “Stevan’s outstanding performance and innovative approach to portfolio construction has already solicited high interest from a number of European institutional investors, wealth managers and family offices looking for a UCITS version of this fund.”
 
Deutsche Asset & Wealth Management is planning to develop a UCITS version of its recently launched DWS Strategic Equity Long/Short Fund reported Citywire Global this week.  
 
A DWS spokesperson told Citywire Global: “As a leader in liquid alternatives, the business is working on similar initiatives for the Ucits market in Europe.”
 
The DWS Strategic Equity Long/Short Fund is a mutual fund which seeks to provide long-term capital appreciation by employing a multi-manager investment approach. At the time of launching Jerry Miller, head of DeAWM in the Americas said: “Alternative mutual funds are a critical part of our overall Americas strategy and we are committed to growing this platform.”
 
“DWS Strategic Equity Long/Short Fund is a great example of DeAWM’s competencies coming together in a product that will allow investors to diversify their equity exposures and capitalise on market opportunities,” added Bernard Abdo, head of DeAWM’s Alternative & Fund Solutions (AFS) group in the Americas. “It combines our research and risk management capabilities with the expertise of some of the leading long/short equity managers into a single mutual fund, which seeks attractive, risk-adjusted returns over the long term.”

 
Finally, the Luxembourg Fund Labelling Agency (LuxFLAG) has launched the LuxFLAG ESG Label. The label, available to both UCITS and AIFMD-compliant funds, will be granted to investment funds that meet specific criteria related to environment, social and governance objectives.  
 
Three asset management companies have already committed to apply for the new ESG Label: OFI Asset Management, Nordea and Sparinvest.
 
 
“Over the past ten years, the responsible investment sector has grown at a rate that has outstripped growth in most other investment strategies. The LuxFLAG ESG Label is a new tool in the broad range of initiatives that encourage fund stakeholders to act responsibly and aim for the achievement of a better and sustainable future. We in Luxembourg strongly support this goal,” said Pierre Gramegna, Minister of Finance of the Grand Duchy of Luxembourg.
 

 
Thomas Seale, chairman of LuxFLAG said that the new LuxFLAG label was appropriate for investment funds “which truly incorporate disciplined ESG criteria in their investment process”. He added: “It will help these funds differentiate themselves from other offerings in the market place and it will help investors make informed decisions through the enhanced transparency and visibility the label provides,” says. “As there is no existing product based label covering ESG, the new ESG Label by Luxflag fills a gap in the European investment fund market.”

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