Giant asset management firm Capital Group has accelerated its move into the European funds market with the launch of a US-focused corporate bond fund.
The Luxembourg-domiciled fund, which is set to be formally launched on March 21, mirrors an existing US-only fund and marks the fourth fund Capital Group has made available to European investors.
The strategy aims to deliver attractive risk-adjusted returns from a portfolio of principally investment-grade US corporate bonds. It seeks to provide, over the long term, a high level of total return consistent with capital preservation and prudent risk management.
The strategy is managed with a research-driven, fundamental active approach, while investment decisions are driven by multiple security- and industry-specific factors.
Commenting on the launch, a spokesperson for the company said: ‘For many European investors facing the challenge of low yields in domestic bond markets, US investment-grade corporate bonds offer an attractive way to access higher yields without significant additional risk exposure.
‘For investors concerned about buying US bonds, with the Fed likely to hike rates, it’s interesting to note that US corporates have typically fared well in periods of gradual rate rises.’
The US Corporate Bond strategy follows the launch of Capital Group New Perspective Fund (LUX) in October 2015, Capital Group Investment Company of America (LUX) in June 2016, and Capital Group New World Fund (LUX) in October 2016.
Capital Group said the first three funds made available to European investors have been well received by the market, having already gathered over $1 billion of new assets.