Sparinvest now launches the fixed-income maturity fund High Yield Value Bonds Short Duration 2017, which invests in high yield corporate bonds with short maturities. The fund is an ideal buy and hold product, since it offers a fixed investment in return for a target interest rate of 6.5%-7.5%.
The short maturity of the bonds mitigates the interest rate risk, leaving the fund managers free to primarily focus on the credit risk and ensuring that the companies issuing the bonds do not default on their interest payment. Sparinvest uses the value strategy in the selection of individual corporate bonds in order to minimize the risk of default, and the funds managed by Sparinvest have seen a significantly lower number of defaults than in the market in general.
The fund invests in high yield corporate bonds and matures on 31 December 2017. Because the fund invests in up to 70 different bonds, the portfolio is well-diversified and which further minimizes the overall risk of the fund. The subscription period – at a fixed price of € 100 – runs from 1st October to 14th November 2013 and first day of trading will be on 15th November.
Read more about the fund, strategy and track record of the value bonds strategy here
*Projected returns are based on current yield levels taking the historic default and recovery rates experienced by running the strategy. Past performance is no guarantee for future performance.