Morgan Stanley launches 4-year fixed income Sicav

Added 26th October 2016

Morgan Stanley Investment Management (MSIM)has launched a Luxembourg-based Sicav which will invest in a globally diversified range of fixed income securities in order to deliver a stable source of income with a low volatility risk over a short duration of four years.

Morgan Stanley launches 4-year fixed income Sicav

Called the Morgan Stanley Investment Funds Global Buy and Hold 2020 Bond Fund, it will invest in government bonds, investment grade and high yield corporate bonds and emerging market debt, all with an expected maturity of approximately four years.

The fund will be managed by MSIM’s Global Fixed Income Team, and the lead managers of the portfolio are Jim Caron, Marco Spaltro, Leon Grenyer and Joseph Mehlman.

Caron said: “For investors seeking a stable source of income in the current climate of lower yields that is vulnerable to bouts of higher volatility, we believe this fund is very attractive because it can serve to reduce volatility and increase diversification of income in one’s portfolio.

“In the current low interest-rate environment, the search for yield from fixed income products has intensified, and this fund may provide a solution to meet the demand from investors looking for an alternative to European government bonds or other kinds of non-diversified fixed income exposure.”

MSIM said the portfolio will be constructed using a two-pillar approach, drawing upon quantitative modelling and fundamental analysis.

“These complementary approaches allow for a suitable top-down strategy while making sure that the bonds owned are robust from a bottom-up perspective, ensuring a high likelihood of reaching clients’ return targets.

“The investment approach is not tied to the benchmark, so the final portfolio is not oriented to the market.”

The fund will be available to investors in the UK, France, Spain and Italy. The base currency is the euro.

MSIM said the fund will have three distinct phases:  an asset gathering period from 21 October to 9 December 2016; a principal investment period - from 2016 to 2020; and a post-investment period - from January to June 2021.

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Richard Hubbard

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Richard Hubbard is the group editor at Last Word. He is responsible for the editorial content of International Adviser, Portfolio Adviser, Expert Investor and Fund Selector Asia. Richard previously worked for Thomson Reuters and has covered the financial services industry and investment themes from its offices in London, Singapore, Hong Kong and New York. Richard started his career at the Australian Financial Review in Sydney.

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