Italian asset management firm Azimut has launched UCITS IV-compliant hybrid bonds fund in Europe, its first product investing entirely in hybrid bonds.
The fund named, AZ Fund Hybrid Bonds, will invest 100% of its assets in hybrid bonds and has an investment time horizon of four and a half years.
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According to Azimut, the fund will offer diversification to investors in terms of issuer, sector, and geographic reach to produce a portfolio with an optimal risk/return profile.
AZ Fund Hybrid Bonds are designed especially for high-end clientele of the group and has a minimum entry fee of 25,000.
The asset manager added that the management will focus on the choice of the securities in the portfolio and on the daily inspection of the soundness of issuers.
Stefano Mach, manager of the new fund, said: "Hybrid bonds are a funding source which is in between equities and traditional bonds in terms of investing costs. We believe that the strong growth of this asset class will continue in the coming months and will be increasingly present in the portfolios of private and institutional clients.
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By GlobalData"Several issuers prefer to get funding through these financial instruments not only because it improves credit structure but also because "it does not dilute the value for shareholders and it accounts for only 50% as debt," he added.
