Jupiter is to launch a Strategic Bond fund on 2 June with a target yield of 7%.
The fund is aimed at investors with a medium to long term outlook seeking income with potential for capital growth.
It will be managed as a 'go-anywhere' fund with the ability to switch from a conservative to aggressive stance depending on circumstances.
Ariel Bezalel, who has 10 years experience working in credit markets at Jupiter, will run the new fund. He currently manages the fixed interest components of three unit trusts; Jupiter Global Managed, Jupiter High Income and Jupiter Monthly Income.
The portfolio will hold around 60 instruments, with a focus on European credit. It will have a minimum of 20% in high yield instruments and Bezalel will seek to invest in areas that offer the opportunity for good capital growth and in government bond markets in times of stress.
Bezalel believes credit markets present a potentially historic opportunity with valuations, particularly in the investment grade space.
He says: "The investment grade market is pricing in a severe recession and the high yield market is pricing in a sharp rise in defaults. Whilst I am cautious on the economic outlook, current valuations seem to offer potentially handsome rewards for the risk. This situation, in my view, presents the most compelling investment opportunity in credit we have seen for many years."
The fund will be benchmarked against IBOXX Non Gilt Index. It has a 4% initial and 1.25% AMC. The minimum investment is £500 lump sum and £50 monthly saving.IFAonline
Our regular video series continues
Investor focus shifts to risk
Joined with 21 Partners
Adds £130m assets under influence
Nexus IFA among first to sign up