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Credit Suisse floats fixed maturity bond fund

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Credit Suisse Asset Management is offering investors the opportunity to partake in a bond fund with a fixed maturity.

Credit Suisse (Lux) Fixed Maturity Bond Fund 2020 S-1 seeks to provide investors with an attractive yield pickup with a short, predetermined maturity date.
 
The fund invests mainly in USD-denominated corporate bonds with a maximum maturity on 30 September 2020.
 
The target allocation of the fund includes both investment-grade and non-investment-grade bonds from developed and emerging markets. The fund's portfolio is projected to have an average investment-grade rating.
 
The actively managed fund invests mainly in bonds that will mature close to the fund's maturity date.
 
"By holding onto the bonds until maturity, investors benefit first from regular returns over a fixed time horizon. At the same time, the interest rate and spread risk decreases as the bonds move closer to maturity," says Romeo Sakac, senior portfolio manager at Credit Suisse.
 
Depending on market conditions, the projected (gross) yield-to-maturity is between 3.0 per cent and 3.5 per cent. For non-retained USD share classes, the fund aims for semi-annual payouts of 2.0 per cent per annum.
 
The UCITS-compliant fund domiciled in Luxembourg provides investors with an attractive yield in a market environment characterised by very low – and even some negative – interest rates. This allows the fund to have a payout structure similar to a single bond investment, but the potential risk of loss through default by an individual issuer is significantly reduced, thanks to the broad diversification of the portfolio. Daily redemption opportunities also ensure high liquidity.
 
"With Credit Suisse (Lux) Fixed Maturity Bond Fund 2020 S-1, we are implementing an established concept that is in high demand among investors. Credit Suisse Nova (Lux) Fixed Maturity Bond Fund 2019 – launched in Q2 2016 – saw inflows of USD 3.3 billion during its short subscription period," says Luc Mathys, managing director and deputy head of fixed income at Credit Suisse Asset Management.
 
The subscription period for the fund ends on 28 September 2016. After this, fund subscriptions are possible with a dilution levy through the end of November. An earlier closing is possible if subscriptions become disproportionately high over time.
 
The fund is approved for distribution in Germany, Austria, Switzerland, Liechtenstein, Luxembourg, UK, France, Italy, Spain, Netherlands, Norway, Sweden and Finland as well as Singapore.

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