Asset classes

Macro fixed income strategy with strong downside risk management focusing on macro and asset allocation opportunities alongside relative value plays.

The Aviva Investors Absolute T250 Bond Fund seeks to achieve a net absolute return in both up and down markets by investing in bonds of worldwide issuers or financial derivative instruments based on global interest rates and currencies.

Investment strategy   

The fund has a distinctive strategy which focuses on macro and asset allocation opportunities, together with relative value plays, to provide competitive returns and strong downside risk management. The fund is structured to avoid corporate credit risk, and focuses on global sovereign bond markets and interest rate disparities.

The most significant opportunities arise from major economic themes and market dislocations, enabling investors with a deep understanding of economic drivers and market dynamics the opportunity to earn excess returns through high-conviction investment ideas.  Identifying economic and market trends and devising efficient, risk-controlled methods of exploiting them are therefore essential to running this wide-reaching strategy. The diversified sources of value targeted by the fund include global interest rates, foreign exchange rates, credit and sovereign bonds, volatility trades and anomaly trades around auctions and buybacks. The portfolio typically centres on 3-6 lowly correlated investment themes, each of which is expressed through a number of different trading strategies.

Portfolio applications

The fund can offer a natural home for longer-term and strategic cash holdings or could act as a diversifier in cautious or balanced portfolios. In addition to targeting a competitive return which exceeds short-term interest rates, the fund offers advantages over mainstream cash management products, including:

• Strong downside risk management
• Low corporate credit risk
• High liquidity through daily dealing.