Aegon Asset Management has launched the Aegon ABS Opportunity Fund aimed at delivering a through-the-cycle return of Euribor+500 bps via active investment in asset-backed securities.
The new fund builds on Aegon AM’s proven skill set of delivering superior total returns from ABS. It leverages the expertise of the 20-strong global ABS team, with Frank Meijer as lead Portfolio Manager of the Fund. The team has extensive experience in managing ABS portfolios with different risk-return profiles and currently manages EUR15 billion in ABS globally.
The ABS Opportunity Fund focuses on investment in ABS with a credit rating deemed to be ‘non-investment grade’; an area the team believe offers ABS opportunities with favourable drawdown, return and volatility characteristics. The fund is designed to invest across the global ABS area with a focus on European ABS markets.
The strategy of the new fund aims to offer investors several distinct benefits including attractive risk/return characteristics, low interest sensitivity, and an attractive yield. ABS also offers exposure to direct consumer risk, which the team believe is complementary to sovereign and corporate exposure, both of which tend to be well represented within investors’ portfolios.
The fund is an Irish domiciled Qualifying Investor Alternative Investment Fund (Irish QIAIF). It is currently available for sale in UK, NL, Ireland, Belgium, Spain, Italy, Denmark, Finland, Sweden and Norway.
Meijer says: “We believe that clients have been drawn to ABS for a number of reasons, not least the attractive yield offered compared to traditional fixed income. Many clients are also seeking to build allocations to alternative fixed income or illiquid asset classes. Our new ABS offering is a relatively liquid alternative fixed income strategy that compares favourably with other potential options such as hedge funds which investors may consider too volatile or traditional fixed income like high yield where there is insufficient yield – especially in current markets.”