The asset management arm of British insurance group Aviva is looking to offer fixed income investors an adequate risk/return profile in the current low yield environment.

Aviva Investors has launched a multi-strategy fixed income fund, providing exposure to the full fixed income universe with the aim of delivering steady capital growth for investors.

The AIMS (Aviva Investors Multi-Strategy) Fixed Income Fund will invest in a diversified portfolio of between 25 to 35 strategies, constructed into three categories: market strategies, opportunistic strategies and risk-reducing strategies. It will focus on absolute risk-adjusted returns rather than a benchmark-relative approach.

The fund will target a three per cent annual gross return over cash, represented by the ECB base rate (or equivalent), over rolling three-year periods.

It will be managed by Dan James, the firm’s global head of fixed income; James McAlevey, senior portfolio manager; Orla Garvey, senior portfolio manager; and Joubeen Hurren, portfolio manager.

“Falling interest rates over the last 25 years have created a tailwind for fixed income returns, which is unlikely to be repeated over the next five or 10 years. By taking an unconstrained approach and investing in a diversified portfolio, the AIMS Fixed Income Fund has the flexibility to ensure risk is adequately rewarded by an appropriate return,” said James.

The fund will initially be available in three institutional share class formats: euro, British pound (hedged) and US dollar (hedged) versions with an annual management charge of 0.35 per cent.