Aegon AM wins short-dated investment grade bond mandates

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Adrian Hull, head of fixed income, Aegon AM.

Aegon Asset Management’s reports it has won two UK clients totalling £325 million for its short-dated investment grade bond strategy, with a further mandate awarded and awaiting funding.

The Aegon Short Dated Investment Grade Bond Fund, managed by Iain Buckle and Rory Sandilands, offers investors an Environmental, Social and Governance (ESG) -integrated portfolio of high-quality short-dated bonds.

The portfolio is managed with the intention of having a low-carbon footprint and to limit exposure to carbon transition risks. The fund offers risk-adjusted returns from what Aegon says are relatively competitive yields in the investment grade bond market. It is focused on strong capital preservation, low sensitivity to interest rate movements and high visibility to future cash-flows.

The Aegon Short Dated Investment Grade Bond Fund targets a return of cash plus 1.25% over a rolling three years, gross of fees, through a diversified portfolio that is designed to minimise defaults and downgrade risks, while maintaining low turnover and trading costs.

Both fund managers have over 20 years industry experience and are supported by Aegon AM’s 147-strong global fixed income team. Buckle is also currently co-manager on the Aegon Ethical Bond and the Aegon Sterling Corporate Bond funds while Sandilands is co-manager of the Aegon Investment Grade Bond and Aegon Absolute Return Bond funds.

Commenting on the recent wins, Aegon AM’s UK head of fixed income Adrian Hull says, “Short-dated investment grade bonds can offer an attractive solution for investors, due to their inherent structural liquidity and yield. These clients were attracted to our integrated ESG approach and low carbon intensity. The portfolio is constructed of shorter-dated and maturing bonds and gathers coupons to provide them with a steady cash stream compared to other cash alternatives and avoiding interest rate risk of longer-dated funds.”

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