Wealth Manager - the site for professional investment managers

Register to get unlimited access to Citywire’s fund manager database. Registration is free and only takes a minute.

Goldmans prepares for rate rises with flexible income fund launch

Goldmans prepares for rate rises with flexible income fund launch

Goldman Sachs Asset Management has launched a multi-asset income fund that offers flexibility in preparation for interest rate rises.

The Global Income Builder Portfolio will invest in global bonds and equities, seeking to generate income and capital appreciation with less volatility than traditional equity markets, and the strategy will focus on higher yielding securities.

The fund’s reference benchmark is a composite index, with 60% from the Barclays Capital US High Yield index and 40% from the MSCI World index.

Its baseline allocation will therefore be 60% to fixed income and 40% to equities, but it will retain the flexibility to tilt opportunistically above or below that split toward either asset class.

As well as traditional equities and bonds, the fund will employ ‘non-traditional sources of income’, such as preferred stocks, bank loans, energy infrastructure shares, and business development companies (BDCs) – a type of US entity that invests in small and mid caps. The Wells Fargo BDC index, for example, yielded 8.2% at the end of February.

The fund will be managed by an investment committee drawing on Goldman Sachs’ global fixed income and fundamental equity teams, who together are responsible for more than £240 billion.

'The team also has the ability to actively manage its interest rate risk which we believe is a key feature given the outlook for rates,' commented Nick Phillips, head of third-party distribution for Europe, the Middle East and Africa at Goldman Sachs Asset Management.

The fund will have a base management fee of 1.25%, with a minimum investment of $5,000 (£3,000). It will be available in share classes that distribute dividends and interest income monthly.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Play Big City Bright Future

Big City Bright Future

Big City Bright Future, the brainchild of BlackRock, is a three-week work experience programme for school leavers looking to forge a career in the City.

Play Kames' Ennett: Trump good for US high yield, but beware Europe

Kames' Ennett: Trump good for US high yield, but beware Europe

Kames Capital’s head of high yield David Ennett believes the changing political landscape will be a positive for the US, but negative for Europe in 2017.

Play Philip Milburn: why inflation won't run out of control

Philip Milburn: why inflation won't run out of control

Kames bond fund manager views inflation as more of 'scare' than a 'problem' and is positioning his portfolios accordingly.

Read More
Your Business: Cover Star Club

Profile: from Batman Live to commodity beta

Profile: from Batman Live to commodity beta

Charteris may be a family affair, but the company is not at any risk of turning sentimental

Wealth Manager on Twitter