Norwich Union, part of Aviva, today announced it is to extend and enhance its range of fixed interest funds.
Norwich Union, part of Aviva, today announced it is to extend and enhance its range of fixed interest funds.
It will launch two new bond funds: Norwich Strategic Bond Fund and Norwich High Yield Bond Fund.
The funds will be managed by Dominic White and Chris Higham of, Aviva Investors, the UK-based asset management arm of Aviva plc. They will be available to UK investors direct from Norwich Union, financial advisers, major fund platforms, and life bonds later in the year.
The Norwich Strategic Bond Fund will have a portfolio of between 60-80 stocks and has the freedom to invest in a mix of up to 100% high yield, 50% emerging market debt and up to 80% investment grade bonds. The manager will be able to take strategic decisions on the potentially better performing areas of the sterling fixed income universe and invest accordingly.
The Norwich High Yield Bond Fund will invest in about 50-60 stocks from both European and US high yield markets, but also has the ability to take advantage of opportunities in both investment grade and emerging markets. The aim of this fund is to deliver top quartile performance in the IMA High Yield sector.
John Clougherty, managing director of retail investments at Norwich Union, said: "The Norwich Strategic Bond and Norwich High Yield Bond funds will make our range of fixed interest funds more attractive to investors and their advisers, and they will benefit from a focused approach, improved process and invigorated fixed income team.
"Although the traditional corporate bond sector remains popular with investors, there has been a substantial increase in demand from investors for both pure high yield funds and for more strategic asset allocation funds. The launch of these funds gives investors greater choice when building investment portfolios.
"The Norwich Strategic Bond fund aims to maximise returns by investing in a diversified portfolio of high yield, emerging market, investment grade and government bonds.
"Aviva Investors is one of the leading managers in fixed income markets. It has one of the largest fixed income teams in the City and has terrific wealth of experience in managing assets in the sector."
Roger Webb, head of credit portfolio management at Aviva Investors, said: "We believe that fixed income markets provide many opportunities to add value through active management. Extreme recent volatility means that most of the assets in our universe are now offering extremely attractive returns for investors. Investment grade bonds have fallen sharply recently and, taking a medium to long-term view, yields have moved up to very attractive levels.
"The expected yield on the Norwich Strategic Bond fund is about 8% to 9%, and the fund is able to invest across the whole fixed interest product spectrum including high yield, investment grade and emerging market bonds. The manager will have the flexibility to allocate funds to sectors that will generate the best returns.
"We have been investing in high yield bonds for over ten years now, and are excited to be launching a dedicated product like Norwich High Yield in this asset class."
The value of an investment and any income can fluctuate and the customer may not get back their original investment. Because of the nature of the investments the funds can make, they have a higher risk than other Norwich Union bond funds.
Unless stated otherwise any opinions expressed are those of Aviva Investors Global Services Limited. They should not be viewed as indicating any guarantee of return from an investment managed by Aviva Investors nor as advice of any nature.
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About the funds
Norwich Strategic Bond fund
Fund size: £50m. Approx holdings at launch: 60-80. IMA Sector: £ Strategic Bond. Initial charge: 4%. AMC: 1%. Estimated TER: 1.23% (retail). Standard initial commission: 3%. Renewal commission: 0.25%.
Norwich High Yield Bond fund
Fund size: £25m. Approx holdings at launch: 50-60. IMA Sector: £ High Yield. Initial charge: 4%. AMC: 1%. Estimated TER: 1.23% (retail). Standard initial commission: 3%. Renewal commission: 0.25%.
Both funds will be available on the following platforms over the coming months: FundsNetwork, Cofunds, Selestia, Transact, Nexus, Fundzone, Elevate, Fundsidirect, Allfunds.
Other fixed interest funds in the Norwich Union range are: Norwich Corporate Bond Fund, Sustainable Future Corporate Bond Fund, Norwich Higher Income Plus, Norwich Managed High Income Fund, and Norwich Monthly Income Plus.
About Norwich Union
Norwich Union is the UK's largest insurer. It is a leading provider of life, pensions and investment products and one of the largest financial adviser (FA) providers. FAs provide over 70% of the company's long-term savings business in the UK.
Norwich Union is the UK's largest general insurer with a market share of around 14%, with a focus on insurance for individuals and small businesses.
Norwich Union's news releases and a selection of images are available from Aviva's internet press centre at www.aviva.com/media
In the summer of 2009 Norwich Union will change its name to Aviva. Aviva is the world's fifth largest insurance group and operates in 27 countries. Aviva is to become the customer brand worldwide, thus enabling the company to compete even more effectively on a global scale for the benefit of customers, staff, business partners and shareholders.
Aviva Investors
Aviva Investors is the global asset management business of Aviva plc, the world's fifth-largest insurance group. The company operates under a single brand with more than 1,100 employees in 21 locations across North America, the UK, Europe, and the Asia Pacific.
Aviva Investors combines the following former businesses in: the UK (Morley Fund Management); France (Aviva Gestion d'Actifs); North America (Aviva Capital Management, MFM International, Aviva Investment Canada); Ireland (Hibernian Investment Managers); Australia (Portfolio Partners); Poland (CUIM Polska); and Romania (CertInvest); and works in partnership with Delta Lloyd Asset Management in the Netherlands.