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Ignis Absolute Return Government Bond Fund

The Absolute Return Government Bond Fund aims to provide positive investment returns on a rolling twelve months basis, independent of bond and equity market conditions.

The fund aims to achieve its objective within a target volatility of between four to six percent.  It is actively managed using a combination of assets (such as government bonds, foreign currency markets and money market instruments) and ‘derivatives’. In particular the Fund will utilise strategies to actively manage interest rate exposure.

Derivatives are sophisticated investment instruments linked to the rise and fall of the price of other assets.  The fund uses derivatives to meet its investment objectives, for example, for short selling techniques (which are designed to make a profit from falling prices). Derivatives can create leverage, magnifying the effect of a change in the price of fund assets, and in extremely adverse markets, when significant events such as the failure of market participants or certain financial instruments become difficult to trade, the leverage from using derivatives can magnify losses. Derivatives are monitored and controlled to ensure the fund is not exposed to excessive or unintended risks.

Investors should be aware that their capital is at risk and that there is no guarantee that the positive total returns will be achieved over the rolling twelve months or any time period.

  • Ignis rates team: is made up of nine investment professionals who manage approximately €24.5bn* in funds and mandates. The team, which specialises in government bonds, has successfully employed a unique, state of the art, proprietary rates process since 2005.
  • Diversification: takes long and short positions# in the most important and liquid global government bonds and currencies. Returns are lowly correlated to traditional equity and bond funds. The fund has no corporate bond exposure.
  • Positive returns in all market conditions: the fund is designed with the aim of providing investors with absolute returns (on a 12 month rolling basis). Investors should be aware that their capital is at risk and there is no guarantee that the positive total returns will be achieved over the rolling 12 months, or any, time period.
  • Investment flexibility: the fund can also invest in derivatives on interest rates, currencies and fixed or variable interest government securities to reflect the managers’ views. Foreign currency exposure limited to 25% of the risk budget of the fund.

Fund Facts  
Launch date31 March 2011
DomiciledLuxembourg
Fund size€2,094.2m
BenchmarkCash (as measured by the overnight rate)^
Share classes available in:EUR, GBP, CHF, SEK, USD
Initial chargeup to 5%
Annual chargeA Class Shares – 1.0%,
I Class Shares – 0.50%
Performance fee10% of performance generated above the cash rate^
Base currencyGBP
Dealing time12 noon (CET)

In the latest Ignis Absolute Return Government Bond Fund webcast, Philip Goldsmith, managing director for Europe, and Jonathan Gibbs, new fund manager, discuss the recent changes within the team, address the fund’s current performance and give an overview of the portfolio changes that have taken place.

Absolute Return Government Bond Fund Video

*Source: Internal at 30/06/14.

^The cash level is based on the overnight rate. This is the rate that large banks use to borrow from, and lend to, one another on the overnight market. In Europe this is EONIA (European Over Night Index Average).

#The funds take long and short positions based on the fund manager's views of the market direction. This means the fund's performance is unlikely to track the performance of broader bond and equity markets. While this creates the opportunity for a fund to deliver positive returns in falling markets, it also means that a fund could deliver negative returns in rising markets. 

All information as at 31/10/14 unless otherwise stated. The fund invests in emerging markets where companies and markets may be less regulated than in developed regions. This can increase the risk attached to those investments.

This information is for professional clients and investment professionals only and should not be relied upon by retail clients.

Past performance is not a guide to future performance. The absolute return nature of the strategy means it is targeting positive returns, but this is not a guarantee and investors may not get back the original capital invested.

The fund is a sub fund of Ignis Global Funds SICAV, an investment company organised under the laws of the Grand Duchy of Luxembourg as a Self Managed SICAV. It is authorised and regulated by the Commission de Surveillance du Secteur Financier (CSSF) in Luxembourg.

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