The latest news in investment offerings, financial products and other services relevant to wealth advisors and their clients.

Fidelity International
Fidelity International has launched the UK-domiciled Fidelity Absolute Return Global Equity Fund (OEIC).

Building on the Luxembourg-domiciled equivalent (SICAV) fund, launched in 2020 and with over $1.6 billion in assets, the new UK-domiciled fund offers investors easier access through domestic investment platforms, alongside familiar tax treatment and regulatory alignment, the firm said in a statement.

The launch responds to growing demand from UK investors and advisors for alternative sources of return and greater portfolio diversification at a time of heightened market uncertainty, elevated valuations and increased concentration across global equity markets.

The fund will be jointly managed by Matt Jones, Hiten Savani and Daniel Swift, who are experience in global equity investing and portfolio management.

“Market-neutral funds represent a powerful diversifier within investment portfolios, particularly for clients seeking to mitigate overall volatility, enhance risk-adjusted returns, and build resilience across market cycles,” Dennis Pellerito, head of UK & Ireland Asset Management client group at Fidelity International, said.

Schroders
In line with a number of investment managers, Schroders has launched another two new fixed income active exchange traded funds (ETFs), as it continues to expand its range across asset classes and geographies.

The Schroder CoCo Financial Credit Active UCITS ETF and Schroder USD Investment Grade Corporate Bond Active UCITS ETF will offer investors access to two distinct areas of global credit. Both ETFs were listed on the London Stock Exchange yesterday.

The firm has already launched four active ETF funds this year, and more are coming before the end of this year. It is building on the development of Schroders’ UCITS active ETF platform, which stands at $4.3 billion in assets under management (AuM), and has expanded over the past year across fixed income and equities.

The Schroder CoCo Financial Credit Active UCITS ETF incorporates an actively managed strategy that invests at least two-thirds of its assets in contingent convertible (CoCo) bonds denominated in US dollars, euros or sterling issued by global financial institutions.

The ETF, which will be managed by Cindy Wang, adopts a bottom-up approach to corporate bonds and uses in-house credit research to identify relative opportunities across regions, financial sub-sectors and credit ratings. The ETF aims to provide income and capital growth in excess of the ICE BofAML Contingent Capital Index (Hedged to USD) after fees over a three- to five-year period.

The Schroder USD Investment Grade Corporate Bond Active UCITS ETF will invest at least two-thirds of its assets in US dollar-denominated fixed and floating rate securities issued by companies worldwide. Managed by Julien Houdain, head of global fixed income, and portfolio managers Martin Coucke and Francois Carrie, its bottom-up investment strategy is designed to exploit structural pricing inefficiencies within corporate bond markets.

“One year on from the launch of our first fixed income active ETF, these additions mark the next stage of our strategic build-out across fixed income and reinforce our ambition to develop a broad active ETF platform across asset classes. Our focus is on bringing established investment capabilities into an ETF wrapper where they can meet clear client needs,” Tom Stephens, head of ETFs at Schroders, said.

Vontobel
Swiss investment firm Vontobel has expanded its fixed-income offering with the launch of the Luxembourg-domiciled Vontobel Fund – Emerging Markets Debt Core, classified under article 8 of the EU’s Sustainable Finance Disclosure Regulation (SFDR). 

The new fund builds on Vontobel’s sovereign emerging market debt expertise and complements the firm’s existing range with a more benchmark-aligned approach by reducing off-benchmark exposures and targeting a lower tracking error. 

“With the Emerging Markets Debt Core fund, we are responding to institutional demand for an active but more benchmark-aligned strategy while preserving the strengths of our established approach. The fund offers a transparent, disciplined way to access sovereign emerging market debt with a clear focus on consistency and risk control,” Wouter Van Overfelt, head of emerging markets bonds, said.

PIMCO
PIMCO, a specialist in active fixed income with expertise across public and private markets, has introduced its Retirement Income Models to UK financial advisors, providing them with access to an investment framework informed by more than a decade of retirement income research and experience in the US.

With the number of UK pensioners expected to increase by 14 per cent by 2035, the launch comes at a time when more people are moving from accumulating wealth to drawing an income from it, creating a different set of challenges for advisors and their clients. Increasing regulatory focus is also reinforcing the need for dedicated retirement approaches that recognise the distinct challenges clients face in decumulation, the firm said in a statement.

According to PIMCO, this area of the market is ripe for innovation, with retirement portfolios needing to balance dependable income with longer-term growth, while taking into account risks linked to sequencing, longevity, inflation and market volatility.

"Retirement income is becoming the next frontier of financial advice," Simon Hillenbrand, head of Global Wealth Management – UK at PIMCO, said. "For decades, advisors have focused on helping clients build wealth. Increasingly, the challenge is how to convert that wealth into an income that can support them through potentially decades of retirement. We believe this requires a distinct investment approach, combining disciplined portfolio construction with a clear understanding of risks that grow in importance once clients start drawing an income."

Baillie Gifford
Investment manager Baillie Gifford has opened the Baillie Gifford Enhanced Yield Fund (BAGEY) to eligible investors in the UK, Switzerland, Hong Kong, and the Cayman Islands, subject to applicable laws, regulations, and distribution restrictions. This next phase extends regulated tokenised funds beyond cash management into actively managed fixed income.

The fund is designed for digital-market participants seeking access to an actively managed fixed-income strategy not previously available in tokenised form. The firm said it is seeing interest from investors who already have onchain capabilities, and crypto native investors, including family offices. It also expects the fund to be a good entry point for traditional clients who want to test out digital assets, such as DC pension and financial advisory platforms and wealth managers.

Money-market funds have shown that regulated investment products can operate onchain. BAGEY builds on that foundation as a US dollar-denominated, UK-regulated OEIC investing in a portfolio of government and corporate bonds. The strategy brings actively managed, short-duration fixed income onto the same infrastructure in pursuit of enhanced yield relative to its benchmark. The portfolio offers a yield of about 7 per cent in dollars, two-year duration and an average credit quality of BBB.

BAGEY is available exclusively as a natively-issued tokenised fund. Deployment will start on Ethereum, with Solana to follow. As a fully-native tokenised fund, each token represents an investor’s holding, with the blockchain being the legal record of ownership. Eligible professional investors can access and hold the fund through regulated digital asset custodians, including BNY, Anchorage Digital, Archax and BitGo Bank & Trust.