T. Rowe Price is looking to amass assets for a recently launched fixed-income fund that is the first of its kind for the Baltimore fund manager. It started the Institutional Core Plus fund, its first, late last year and seeded it with $15 million of its own capital. Now, T. Rowe is hoping to ramp up institutional assets from investors such as pension plans, endowments and defined-contribution funds, according to Brian Brennan, portfolio manager.
Brennan said the investment manager launched the fund to meet demand for incremental yield beyond the Lehman Brothers Aggregate Bond Index without adding risk. The new fund's mandate is to have 65% in investment-grade assets in the Lehman Ag, with caps of 10% on high yield, 20% on non-dollar assets and 5% on low investment-grade emerging market debt. The high-yield segment will be invested in T. Rowe's Institutional High-Yield Fund, while Brennan will use recommendations from T. Rowe's specialists in non-dollar assets and emerging markets to guide his investment in the other two areas.
