London-based investment manager Stratton Street’s New Capital Wealthy Nations Bond Fund has been launched in the Australian market.
The Equity Trustees will act as the responsible entity for the New Capital Wealthy Nations Bond Fund. The fund will focus on investing in the high growth creditor nations of Asia such as China, Singapore and South Korea, which have enough overseas assets to pay back their foreign debt and are borrowing to invest in their long term growth.
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The fund has a recommended minimum investment time frame of five years and the minimum initial investment is US$1 million, although it can be lower if it is done through an Investor Directed Portfolio Service (IDPS).
Stratton Street fixed income portfolio manager, Andrew Seaman, said: "People expect global bond markets to price securities efficiently, but that is not the case."
Seaman added: "We find there are bonds that have substantially higher yields but the same or lower risk profile compared to others, so we can buy these and wait until the market realises where the value is, giving us a higher income and strong capital gain potential."
Seaman said. "The Fund does not invest in countries with liabilities greater than 50 percent of GDP, regardless of their index weighting or supposed credit rating, the fund invests in issuers that Stratton Street believes can sustain their debts and pay investors back."
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