The fund will aim to generate a lower volatility, more consistent return than other fixed income products and will invest in high yield corporate bonds that have an average maturity of less than five years and are domiciled across the world.
The strategy is managed by Aviva Investors’ global high yield team, headed by Todd Youngberg which has assets under management of more than US$4.5bn.
Jeremy Hughes, senior high yield portfolio manager, is the team lead fund manager and will draw on the support of five portfolio managers and 26 credit analysts based in the US, UK, Europe and Asia Pacific.
Youngberg, who is also global investment director of fixed income at Aviva Investors, said: “The challenging economic conditions of the past few years have prompted institutional investors to increasingly reduce risk in their portfolios while trying to maintain strong levels of income.
“Addressing the duration of bond investments is an important step in this process as it defines both price volatility due to spread movement and interest rate risk investors are taking. Next to the credit risk this is the main concern for bond holders.”