Western Asset, a subsidiary of New York-listed Legg Mason, has boosted its fixed income offering with a double launch.

Western Asset has launched two flexible fixed income funds for investors seeking returns from bonds in the current low interest rate environment.

The Legg Mason Western Asset Multi-Asset Credit fund is seeking attractive returns with a volatility budget of 5-7 per cent from a portfolio of global high income securities. Through a range of hedging strategies, it looks to minimise the downside risk to investors in the event of a credit market sell-off. 

The fund, which launched at the end of 2015 with assets of over £100 million ($144 million), is managed by Christopher Orndorff. He is based in the firm's Pasadena, California office.

Meanwhile, the Legg Mason Western Asset Global Total Return Investment Grade Bond fund is managed by a London-based team headed by Gordon Brown and Andrew Cormack. It seeks to maximise total return, while maintaining a focus on liquidity and preservation of capital, with volatility expected to remain below 6 per cent. In order to protect portfolio returns during periods of bond market declines, Brown and Cormack will have the discretion to adopt a negative duration position.

This fund will invest in credit, holding a variety of higher-rated bonds issued by both companies and governments around the world, in both developed and emerging markets. It will also target foreign currencies, with up to 25 per cent in unhedged non-US dollar assets or currencies, and can use derivatives.

“Fixed income investors find themselves at a crossroads in 2016, with the recent rate rise in the US, and the potential for further action from some other central banks globally, creating both opportunities and risks,” said Adam Gent, Legg Mason's head of UK sales.  “In such an uncertain environment, capital preservation is likely to be a priority for fixed income investors, but this does not mean they have to sacrifice income.”

Western Asset had $446.1 billion of assets under management as of the end of September 2015.