Loomis Sayles & Co. has launched a multisector bond fund aimed at advisers who want a way to protect their clients against inflation, deflation and
stagflation.
The Loomis Sayles Multi-Asset Real Return Fund Ticker:(MARYX) invests in fixed income, currencies, commodities and equities — but must have 50% of its assets invested in fixed income, said Kevin Kearns, the portfolio manager of the fund and a senior derivatives strategist.
The fund is also the first Loomis fund that has the ability to buy derivatives.
Due to client concerns over the past year about inflation, Loomis put a team of seven researchers together to examine the different inflation regimes around the world, Mr. Kearns said. “We looked at what the cause of the inflation was in different scenarios and what worked well,” he said. The team identified six different kinds of inflation, and the fund has the flexibility to go long and short at the same time to perform in each of these scenarios, Mr. Kearns said.
Loomis is one of a number of money managers hoping to enjoy some of the flows going into multisector bond funds, experts said.
While tactical allocation has been a buzz phrase in the equity world since the 2008 market meltdown, more fixed-income funds are now trying to do the same, said Todd Rosenbluth, a mutual fund analyst at Standard & Poor's Financial Services LLC.
“We are seeing more fixed-income funds like this one because all of the fund flows are going into fixed income — but they aren’t necessarily sticky,” Mr. Rosenbluth said of the assets flowing into bond funds. “People are moving out of funds if the environment goes from inflation to deflation so firms are trying to create funds that do well in either scenario.”
Multisector bond funds have seen year-to-date inflows of $15.8 billion as of Oct. 4, according to Morningstar Inc.
Last week, Loomis Sayles filed with the Securities and Exchange Commission to launch an Absolute Strategies Fund, which can invest entirely in high-yield bonds, but will aim to keep its exposure to no more than 50% of its assets, according to Bloomberg News.
