AllianceBernstein has converted its Diversified Yield Plus fund into a Ucits-compliant format to capture wider institutional demand, Citywire Global has learned.
The US asset manager had originally launched the fund for UK investors in March 2007 and it has since grown to $1.07 billion in assets.
The fund runs on a long-biased, multi-sector, absolute return basis and is currently managed by John Taylor.
Speaking to Citywire Global, Taylor said: ‘We have been running this fund for UK institutional clients for a long time and have been getting increased interest from the European retail and wholesale markets, which we are responding to.’
‘Given the current economic climate is one of low interest rates, a lot of investors are keen to access strategies which are not tied to a benchmark and able to adopt short duration and a cover a wide array of sectors.’
Taylor said interest rate risk is a major consideration of the fund. This has seen him adopt an average duration of 1.5 years, which, he said, compares to existing global aggregate bond funds which are running closer to five-and-a-half years at present.
The fund holds between 50-200 issuers from across a wide array of issuers, with Taylor particularly keen on the opportunities presented by emerging markets which make up 15% of the fund's exposure.
‘We have built up our emerging market exposure and looked more closely at the opportunities in the local bond market. This has seen us invest in Brazil, Mexico and South Africa, while also looking at issuances from emerging market corporates denominated in US dollars.’
The AllianceBernstein-Diversified Yield Plus fund, in its existing format, has returned 14% over the three years to the end of April 2014. Its benchmark, the Citi WGBI TR USD, rose 3% over the same period in US dollars.