Schroder Investment Management North America is raising assets for the two fixed-income funds it launched at the beginning of this year. The manager has ramped up $30 million in its Enhanced Income Fund and $10 million in its Core Fixed-Income Fund. David Harris, senior v.p. and portfolio manager in New York, said the new strategies have no capacity constraints.
The Enhanced Income Fund is an ultra-short strategy that invests primarily in triple-A mortgage-backed and asset-backed securities. Harris noted demand for an ultra-short product is particularly strong at the moment as many investors are risk averse. He explained investors currently have larger-than-normal cash balances and the ultra-short product offers a stable alternative with extra yield.
The Core Fixed-Income Fund is run across the Lehman Brothers Aggregate Bond Index and is currently overweight corporates and MBS to pick up yield. Harris explained the new funds are part of Schroder's expansion in North America as its U.S. business has lagged its European and Asian distribution. The funds are run by its existing management team.