The Luxembourg-based SICAV will invest in a globally diversified portfolio of MSIM’s “best ideas”, drawn from government bonds, investment grade, high yield corporate bonds and emerging market debt, with an expected maturity of four years, measured from the start of the principal investment period. 

It aims to provide investors with regular income over a four-year period. The fund is managed in three phases – the asset gathering period from 21 October to 9 December 2016; the principal investment period from 2016 to 2020; and the post-investment period from January to June 2021. 

With the euro as its base currency, the fund is available to investors in the UK, France, Spain and Italy. 

The lead managers of the portfolio are Jim Caron, Marco Spaltro, Leon Grenyer and Joseph Mehlman, with support from the wider global fixed income team. Their investment approach, based on quantitative modelling and fundamental analysis, aims to reduce correlation risk and add diversification to asset allocation. The approach is not tied to the benchmark, so the final portfolio is not oriented to the market, MSIM said.

“For investors seeking a stable source of income in the current climate of lower yields that is vulnerable to bouts of higher volatility, we believe this fund is very attractive because it can serve to reduce volatility and increase diversification of income in one’s portfolio,” said Caron. 

“In the current low interest-rate environment, the search for yield from fixed income products has intensified, and this fund may provide a solution to meet the demand from investors looking for an alternative to European government bonds or other kinds of non-diversified fixed income exposure.”

MSIM, together with its investment advisory affiliates, had $417 billion in assets under management or supervision as of 30 September 2016.