Bank of Montreal's global asset management business has boosted its absolute return offering.

BMO Global Asset Management has launched a Luxembourg-domiciled absolute return bond fund seeking attractive levels of return in today’s low-yield environment.

The BMO Global Absolute Return Bond fund is benchmark-agnostic and unconstrained by a particular maturity, credit rating band, sector or geography, but has strict risk limits. A long bias, combined with the ability to go short rates and credit, gives greater flexibility and downside protection, the firm said in a statement. It targets a return of cash plus 3 per cent.

The core credit portfolio is a ‘buy and maintain’ strategy which focuses on exploiting persistent anomalies in investment grade and high yield securities and is well diversified with over 100 issuers to reduce risk. Thematic overlays contribute to return and aid diversification through active management of credit, interest rate and currency risk.

The fund, which is a UCITS SICAV, is managed by BMO GAM’s fixed income team in London. The lead managers are Keith Patton and Ian Robinson. 

It is a liquid investment strategy with daily dealing available. The fund launched with a GBP hedged founder share class (F), a charge of 0.2 per cent and a minimum investment of €5 million ($5.5 million). The institutional (I) share class, with a charge of 0.4 per cent, has a minimum investment of €5 million.