Due to a growing appetite for more fixed income investment options, RS Investments of San Francisco announced Monday that it launched three fixed income funds.
The RS Strategic Income Fund, the RS High Yield Municipal Bond Fund, and the RS Floating Rate Fund are sub-advised by its parent company, Guardian Investor Services LLC, which manages over $20 billion in institutional fixed income portfolios and serves as sub-advisor for the five fixed-income funds already offered by RS.
Terry Otton, chief executive officer of RS Investments, said the company decided to expand its menu of fixed income products because advisors and investors want “sophisticated fixed income choices that provide greater diversification and potential solutions to long-term challenges. Whether it is protection from the declining dollar, hedging against inflation or reducing taxes, these funds help to provide investors with greater flexibility and choices for achieving their income goals.”
The RS Strategic Income Fund, which is managed by a team of six co-portfolio managers, provides investors with diversification across investment grade, high-yield, and global bonds. The RS High Yield Municipal Bond Fund, which is managed by the same team that manages the RS Tax-Exempt Fund, is designed for investors seeking high current income, with a secondary objective of capital appreciation.
The RS Floating Rate Fund invests in bank loans, corporate bonds, and other securities with the goal of providing a moderately high level of current income and protection against rising interest rates.
Veteran fixed income portfolio managers Marc Gross and Kevin Booth, who recently joined Guardian from BlackRock, co-manage the fund with support from a team of senior credit analysts and quantitative analysts.
RS had strong inflows into its fixed income funds in 2009, with total fixed income assets under management increasing to $2.4 billion in the past year.
The new funds open with seed money of $135 million. Each fund will offer multiple share classes and expenses for the A share class have been capped at 35 basis points through April 30, 2011.
Guardian Investor Services is a registered broker-dealer, registered investment advisor, and a wholly owned subsidiary of Guardian Life Insurance Co. of America.