Subject to Irish regulatory approval, the Smith & Williamson Global Government Bond Fund will launch in May.
Chris Lynas, head of fixed interest at the firm will manage the fund, with the support of key strategic views of fixed interest economist Robin Marshall in the position of adviser.
Lynas said: "We are probably facing a protracted period of economic recovery and we’re unlikely to see long and sustained periods of performance from any one asset class. Many advisers will continue to use bond funds for part of their client’s portfolios. With this fund we’re able to move quickly and switch between risk-on and risk-off strategies, making it a bond fund for all seasons.
It will be a Ucits fund domiciled in Dublin and S&W plans to seek FSA approval for marketing in the UK.
The fund will have a flexible mandate, able to invest in both index-linked and conventional government bonds and allowed to have up to 20% in investment grade corporate bonds.
The manager’s approach will be high conviction, with between 20 and 40 holdings and he will also have the ability to hedge back the overseas currency exposure into sterling. No other derivative strategies are planned to be used, however.
Lynas said: "Advisers have been telling us they are concerned about the global economic picture, the contrasting views and high forecasting uncertainty on inflation and deflation, and the challenge of how they determine their fixed interest exposure while finding ways to preserve their clients’ wealth in real terms.
"We believe having the ability to invest mainly in index-linked and conventional government bonds including supranational and government agency issues, in countries such as Canada, Norway, Singapore, Switzerland, the UK and USA, will help us to address advisers’ concerns and challenges."
He added that the benchmark for the fund will be the fixed income portion of the FTSE APCIMS private investors’ indices, which he said was due to the fact many advisers are benchmarked for performance by their clients against these.
The fund joins the S&W specialist range of fixed interest funds, which includes: the Short-Dated Corporate Bond Fund (£360m) and the Fixed Interest Trust (£50m).
Both an institutional and retail class will be available, the first with an AMC of 0.65% and a minimum investment of £250,000 and the latter with an AMC of 1% and a minimum investment of £1,000.
