RS Investments has launched three fixed income funds that will invest in high yield bonds and bank loans and is using $135 million in seed money to fund the funds.
The RS Strategic Income Fund will invest across a variety of fixed income market segments, including high-yield bonds, investment-grade bonds and global bonds. The fund will be run by six portfolio managers who report to Leslie Barbi, head of fixed income investments for RS.
The firm's new RS Floating Rate Fund will invest in bank loans, corporate bonds and other securities. The firm said that 80% of the Floating Rate Fund's holdings will be in leveraged loans and high-yield bonds. It will be led by Portfolio Managers Marc Gross and Kevin Booth, who recently joined the firm from Blackrock. The firm has also launched the RS High Yield Municipal Bond Fund.
“The new funds address the growing appetite among advisers and their clients for sophisticated fixed income choices that provide greater diversification and potential solutions to long-term challenges,” said RS Chief Executive Officer Terry Otton. “Whether it is protection from the declining dollar, hedging against inflation or reducing taxes, there funds help to provide investors with greater flexibility and choices for achieving their income goals.”
Barbi added: “Our approach to fixed income investing is based on risk-adjusted value, relying on intensive fundamental research and a disciplined investment process. The RS bond funds are managed with a focus on assessing returns relative to risk, which includes considering downside protection, not just income—the way we believe bond funds should be managed.”