Patryck Jessen, manager of FvS Laufzeitfonds 2027.
Interest rates are back and bonds are attractive again, especially for conservative investors. The year 2022 was particularly tough for them and they now need to secure, as far as possible, predictable returns. To address this need, Flossbach von Storch has announced the launch of a new maturity fund focused on strength and quality: FvS Laufzeitfonds 2027 (buy&hold fund).
The fund manager, Patryk Jessen, and his fixed-income team will construct a portfolio focused on:
- Corporate bonds, covered bonds, and government bonds from issuers are considered to be of high credit quality, in order to minimize the chances of default.
- Bonds were issued in euros, in order to minimize currency risk.
- Bonds whose maturity coincides with the maturity of the fund, in order to minimize reinvestment risk.
Flossbach von Storch’s investment principles form the basis for each individual investment decision. The objective is to maximize the probability of achieving the expected return at the time of fund launch.
When designing the fund, four years was considered to be an optimal period for combining attractive returns with controlled risk. In fact, priority has been given to safety rather than maximizing expected return. We are currently forecasting an after-cost performance indication of around 3% and are aiming for an annual distribution of 2.75%. The fund will have accumulation and distribution classes. The final target return will be set when the fund is launched. Important: there is no fixed guarantee on the return that can be achieved.
In addition, although the fund has a four-year term, an early “redemption event” is provided for in the client’s interest. At the end of the first three years, if the cumulative expected return at launch is achieved, an early redemption will be made to the client, resulting in a higher annualized return.
The subscription period for the Flossbach von Storch – Laufzeitfonds 2027 starts next week and runs until the end of April 2023. The sub-fund is classified as an Article 8 product within the meaning of the Disclosure Regulation (EU) 2019/2088 (SFDR).
