BlueBay Asset Management has launched the Global Convertible Bond fund, designed to take advantage of cheap valuations currently seen in the convertible bond market.
The fund will invest in convertible bonds benchmarked against the UBS Convertible Global Focus index.
BlueBay believes the current point in the economic cycle affords active managers a great opportunity to give long-only investors exposure to an asset class harnessing the defensive properties of fixed income to the upside potential of equities.
The universe of convertible bonds is extensive, with $400bn market cap and over 2,000 outstanding issuers.
Led by Mike Reed, the fund will be managed by the convertibles team, working closely with BlueBay's proprietary credit analysts covering investment grade, high-yield and emerging markets.
"We believe this is an opportune time to take advantage of some of the cheapest valuations ever seen in the convertible bond market," said Reed.
"The defensive nature of convertibles, together with the equity-style upside that they can provide, gives rise to a potentially highly attractive risk/return profile for investors," he added.
The fund has been launched with initial seed capital of $45m from BlueBay's investors. It will be the eighth subfund of BlueBay's flagship range of long-only funds, offered to investors via BlueBay Funds, a Luxembourg Ucits III umbrella fund structured as a Part I Sicav.
The launch of the Global Convertible Bond fund follows BlueBay's High Income Loan fund, opened last month.
Alberto Francioni, global head of sales at BlueBay, said: "We believe that investors' appetite for well-managed long-only credit funds at this point in the cycle is considerable and this is reflected in the fact that, despite current market conditions, we have seen net inflows into our Ucits III funds range during December."
BlueBay is one of Europe's largest independent managers of fixed income credit products, with approximately $20.5bn AUM at end of September 2008.
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