Allianz Global Investors has broadened its bond fund offering with the launch of a floating rate notes strategy designed to best adapt to the changing rates environment, Citywire Selector has learned.
The Allianz Global Floating Rates Notes Plus fund, which is Luxembourg-domiciled, was formally launched on 8 February and will be overseen by the team under Jonathan Yip.
Floating rate notes emerged as one of the prime areas of interest for delegates at the Citywire Fixed Income Retreat 2018, where many attendees said they are seeking alternative yield plays in the current market.
In fund literature, the German group said it had launched the fund to capitalise on rising rates in the US and the end of ultra-accommodative policies in Europe, which will have knock-on effects for the bond market.
Yip and his team will focus on a combination of sources for return, including investment grade notes, which have high-quality and short durations; high yield notes, which have higher credit risk but lower duration risk; and securitised debt, which offers a strong source of return.
AllianzGI said the fund is one of the first globally invested funds that also offers a wide diversification benefit for fixed income investors.
The company has overseen FRN funds since 1998 and currently has €1.5 billion in assets under management dedicated to this sector.