Royal London Asset Management is launching a new fund in the Investment Management Association’s (IMA) Global Bonds sector.

The Global Index Linked fund is designed for investors that would like to hedge against potential increases in global inflation.

It will be managed by George Henderson, flanked by Paul Rayner and Craig Inches in Royal London’s government bond team.

The fund aims to outperform the Barclays World Government Inflation-linked Bond index by one per cent over rolling three year periods, gross of fees through a portfolio of 30 to 60 holdings.

These holdings will be predominantly in global index linked bonds, although the fund will have the flexibility to invest up to 30 per cent in investment grade corporate debt.

George Henderson, fund manager at Royal London Asset Management, said that the unprecedented levels of liquidity pumped into the markets, coupled with undefined exit strategies have left an uncertain outlook for inflation.

He explained, ‘Index linked bonds provide a very useful hedge against potentially higher inflation and we are seeing compelling opportunities in global index linked bonds which can offer over 50 basis points of increased yield over their UK equivalents.’

Investors buying the fund through a financial adviser should be aware that intermediaries have the option for their adviser to take 3 per cent commission from Royal London for this transaction.

Royal London Asset Management
Global Index Linked fund

IMA sector: IMA Global Bonds 
UK
Fund size at launch: £10m

Initial charge: Class A: 4.0%; Class B: 0.0%

AMC: Class A: 0.70%; Class B: 0.30%

Minimum investment: Class A: £1,000; Class B: £1,000,000

Valuation: Daily at 12 noon