Absolute return bonds

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We have two absolute return bond pooled funds: the Bonds Plus Fund and the Bonds Plus 400 Fund, which targets a higher return.

The aim of these Funds is to produce attractive returns in all market conditions by taking a flexible, broad approach to fixed income that harnesses the best opportunities in the market. The Funds are unconstrained and invest in a wide range of fixed income markets including government bonds, investment grade, high-yield, loans, asset-backed securities, emerging markets and currencies.

Our absolute return bond capabilities are also available on a segregated basis.

Watch our video to hear Peter Bentley, Head of UK and Global Credit discuss why fixed income is suited to an absolute return approach.

Benefits

Cash plus performance target: not tied to the confines of a traditional fixed income benchmark index, allowing managers more freedom in asset allocation in order to seek out different sources of return.

Robust derivatives platform: the Fund’s managers are able to express both positive and negative views, aiming to generate positive performance in all market conditions and hedge unwanted or unrewarded risks where desirable.

Global diversification: aims for consistent risk-adjusted returns by investing across the full global opportunity set while operating within strict risk-management parameters.

Effective return-seeking component of an LDI strategy: helps generate positive absolute returns while avoiding downside risks to help improve a scheme's funding level.

Snapshot

Snapshot of Absolute Return Bonds

Fixed income team in numbers

  • 112 Fixed income investment professionals globally
  • 17years Average experience of fixed income team
  • £124.1bn fixed income assets

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Team statistics as at 30 June 2018. Assets under management (AUM) are represented by the value of cash securities and other economic exposure managed for clients.

Important information

The value of investments and any income from them will fluctuate and is not guaranteed (this may be partly due to exchange rate fluctuations). Investors may not get back the full amount invested. Past performance is not a guide to future performance.

Derivatives may be used to generate returns as well as to reduce costs and/or the overall risk of the portfolio. Using derivatives can involve a higher level of risk. A small movement in the price of an underlying investment may result in a disproportionately large movement in the price of the derivative investment.

A credit default swap (CDS) provides a measure of protection against defaults of debt issuers but there is no assurance their use will be effective or will have the desired result.

Investments in bonds are affected by interest rates and inflation trends which may affect the value of the portfolio.

The investment manager may invest in instruments which can be difficult to sell when markets are stressed.

Where leverage is used through the use of swaps and other derivative instruments, this can increase the overall volatility. Any event that adversely affects the value of an investment would be magnified if leverage is employed by the portfolio and losses would be greater than if leverage were not employed.

These Funds meets the definition of a covered fund under Volcker regulations.

Any losses in the fund will be borne solely by investors in the fund and not by BNY Mellon (including its affiliates); therefore BNY Mellon's losses in the fund will be limited to losses attributable to the ownership interests in the fund held by BNY Mellon and any affiliate in its capacity as an investor in the fund or as beneficiary of a restricted profit interest held by BNY Mellon or any affiliate.

Ownership interests in the fund are not insured by the FDIC, are not deposits, obligations of, or endorsed or guaranteed in any way, by BNY Mellon. Neither BNY Mellon nor any of its controlled affiliates (which includes the fund's general manager/ managing partner/ investment adviser), may directly or indirectly, guarantee, assume, or otherwise insure the obligations or performance of the fund or of any other covered fund in which the fund invests.

Investors should read the fund's offering documents before investing in the fund. Information about the role of BNY Mellon, its controlled affiliates, and their employees in sponsoring or providing services to the fund are described in the Volcker Rule section of the offering documents.

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