Kames Capital has successfully launched a short dated high yield bond fund, which aims to deliver mid-single digit percent per annum returns through the cycle, while maintaining low interest rate and credit sensitivity.
The Kames Short Dated High Yield Global Bond Fund, managed by Stephen Baines and David Ennett, supported by Jack Holmes, builds upon Kames’ proven skill set of delivering superior risk-adjusted returns in the high yield bond market. The fund also leverages the expertise of the firm’s five-strong high yield team, which also includes bond veteran Phil Milburn, head of fixed income investment strategy. The team is currently responsible for $2 billion of global high yield bond mandates and is part of the wider 28 strong Kames Capital fixed income team.
The fund has a global remit to maximise its opportunity set and adopts an investment process that utilises Kames’ strong stock picking ability, while aiming to deliver lower risk returns with a sub two-year duration target, a five and a half year issue maturity limit, and a focus on the BB and B rated segments of the corporate bond market.
Commenting on the launch, which benefits from capital commitments by third-party investors, Baines says: “We have a hugely successful 14-year track record of managing a dedicated global high yield strategy and delivering attractive risk-adjusted returns. We believe it is beneficial to adopt an active, high conviction approach with a global remit. This allows us to avoid the pitfalls of sector and issuer concentrations that develop from time-to-time within the index.
“Our analysis shows that both in periods of deteriorating credit risk and rising government bond yields, short-dated high yield bonds have shown greater price resilience than the broader high yield bond market. They also offer returns that are negatively correlated with government bond market returns.
The Kames Short Dated High Yield Global Bond Fund uses the same proven and robust investment process as our broad market high yield strategy, offering investors a short-dated high yield portfolio managed under the stewardship of our High Yield team.”
The Kames Short Dated High Yield Global Bond Fund is Dublin domiciled and has US Dollars as its base currency, although it also has Sterling, Euro, Swiss Franc and Swedish Krona share classes.