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Ninety One launches Global Diversified Income Fund as investor appetite for yield grows

Ninety One launches Global Diversified Income Fund as investor appetite for yield grows
15-09-23 / Chris Smit

Ninety One launches Global Diversified Income Fund as investor appetite for yield grows

Cape Town - In response to growing demand from conservative SA investors looking for defensive global income, Ninety One today announced the launch of the Ninety One Global Diversified Income Fund. This fund is a compelling proposition for investors seeking an alternative to US-dollar bank deposits, as it aims to provide income of 1.5% above US-dollar cash returns over 12-month periods, while retaining a capital protection bias.

The actively managed fund can invest across global government debt, credit, and currency markets to maximise income but also improve the resilience of the portfolio. Allocations to riskier asset classes (high-yield credit or emerging market sovereigns) are constrained to allow the fund to manage risk and thus avoid annual drawdowns.

The Global Diversified Income Fund draws on the success of the local Ninety One Diversified Income Fund, adopting a similar approach to portfolio construction. The local fund has a long-term track record of participating when the South African bond market performs well and protecting investors when the market underperforms cash. By applying this investment philosophy within a global context, the team has designed a fund that enhances global income whilst maintaining defensive characteristics. 

According to Co-Portfolio Manager Paul Carr, global disinflation is the most impactful theme driving fixed income markets currently. "The deceleration in headline inflation globally is underway, which is a strong tailwind for fixed income investments. The disinflationary trend will allow global central banks to pause tightening cycles earlier while growth remains resilient, allowing for a less severe economic slowdown."

Commenting on current positioning, Adam Furlan, who manages the Fund alongside Carr, said, "Our allocation to short-dated investment-grade credit will perform well in this environment and act defensively if growth were to slow more than expected. We've allocated to developed market financial sectors and high-quality emerging market corporates operating in investment-grade jurisdictions. We also have exposure to the US dollar relative to a basket of developed market currencies, which will protect capital if we were to experience a US-led inflation reacceleration."

The Fund leverages the expertise of Ninety One's more than 70 global fixed income investment specialists based in London, Cape Town, Hong Kong and New York. It employs a high-conviction approach focusing on the best ideas from the global fixed income investment universe. 

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