Columbia Threadneedle Investments is introducing a new, total return short maturity high yield strategy – the Threadneedle (Lux) European Short-Term High Yield Bond Fund. It will follow the investment approach of the firm’s European High Yield Bond Fund with a focus on shorter maturity bonds.
Roman Gaiser, Columbia Threadneedle’s head of high yield portfolio management EMEA, will co-manage the strategy with Gareth Simmons, high yield portfolio manager and investment analyst, supported by the European high yield team. Both are also co-managers of the European High Yield Bond fund.
The new strategy is a bottom-up, total return credit strategy that is agnostic to a market index and aims to deliver income, with some capital appreciation, by investing primarily in short maturity European high yield credit.
“Our approach to managing credit strategies is grounded in intensive fundamental research that allows the team to measure the risk on an absolute basis,” Gaiser said, adding that the fund focuses on a bond’s maturity rather than duration when managing risk. This removes the unpredictability of duration extension risk, giving this vehicle lower interest rate sensitivity than a standard high yield bond fund.