BNY Mellon launches euro credit fund in UK

BNY Mellon is launching its WestLB Mellon Euro Credit Short Duration fund in the UK with a new sterling share class.

The fund is part of the firm’s WestLB Mellon Compass Fund range and invests in corporate bonds denominated in euros with a rating of at least B3 or B-, with a residual maturity of 3.5 years.

The Luxembourg-domiciled fund, managed by Alexis Renault, has a 4% yield target with a volatility of less than 4%, and actively allocates between investment grade and high yield.

A minimum of 20% of the assets will be invested in sub-investment grade bonds, and issuers are principally from countries with investment grade rating.

The fund was originally launched in August 2011 and has assets under management of €384 million.

Seven Investment Management is one of the firms to seed the new GBP share class of the high yield fund.

Peter Sleep, senior portfolio manager at the firm, said: ‘The fund is attractive as it gives exposure the European junk bond market, which had a torrid time in 2012. 

‘The fund manager has a great track record due to its research driven process. It is attractive to us as it produces good income, but the short duration of the fund may help reduce the impact of any back up in interest rates.’

BNY completed its acquisition of WestLB Mellon last October, buying the remaining 50% stake from joint venture partner Portigon. BNY Mellon and Portigon created WestLB in 2006, each holding a 50% stake.