Antecedo Asset Management, a German boutique best-known for its absolute return strategies, has launched a European fixed income fund.
The Antecedo Euro Yield fund invests in AAA and AA-rated corporate and government bonds that follow the iBoxx Overall AAA-AA TR index and was launched at the end of last month.
The aim of the fund is to beat the index by 2% annually through allocating a small part, at roughly 1.9%, to derivatives.
'The idea is that in our derivatives allocation we will sell bonds with one month duration and buy 12 month duration. Otherwise the fund looks very similar to the index,' Kay-Peter Tönnes, fund manager and the boutique's founder, told Citywire Global on Monday.
'There is the classical perception that with more time there comes more risk and this is about thinking differently.'
The fund, with currently around €18 million in assets, is targeted at investors with a longer-term horizon, added Tönnes. Due to perceived risk in the sector, the fund doesn't currently invest in corporate bonds.
'We have had much interest from insurance firms that need to allocate a part in bonds. Of course, there is still interest rate risk and the fund is clearly for those investors that are looking to invest in bond funds.'
In 2009, the firm launched the Antecedo Independent Invest fund, also managed by Tönnes which currently has over €300 million in assets and invests in short-dated high-quality bonds.