BNY Mellon Investment Management (IM) has launched a US high-yield smart beta fund in the UK.
The US High Yield Beta fund will be managed by the firm’s San Francisco-based boutique Mellon Capital Management.
The fund aims to deliver returns similar to the Bloomberg Barclays US Corporate High Yield Index across a full market cycle by maintaining market risk in line with the benchmark and monitory default risk.
The strategy will carry an annual management charge of o.2%.
‘Accessing the returns of the high yield market has proven to be elusive, with asset managers struggling to keep pace with the performance of the broad market index,’ said Matt Oomen, head of international distribution at BNY Mellon IM.
‘This is particularly true on a net basis. The fund we are introducing is more cost efficient than the competition and has an innovative approach to sourcing bonds and managing transaction costs.
'We believe it will deliver competitive performance in line with the index, and features improved liquidity in an illiquid sector.’
He added the fund is based on a strategy Mellon Capital Management has been running for the last five years.
Paul Benson, head of fixed income portfolio management at Mellon Capital Management, said: ‘We believe there is a real opportunity in the high-yield market. Our investment strategy offers investors the chance to make a cost-effective asset allocation to the US high yield market.’
The fund is registered for distribution in the UK, Germany, France, Italy, Spain, the Netherlands, Austria, Belgium, Denmark, Finland, Norway and Sweden. It will also be registered in Switzerland.