American Beacon advisors launched the American Beacon Sound Point Enhancement Income Fund (SPEYX), a non-diversified interval fund.
Interval funds are continuously offered closed-end funds that periodically offer to repurchase their shares from shareholders. Unlike open-end mutual funds, interval funds do not provide daily liquidity but instead offer investors an ability to redeem up to a certain percentage of the fund at regular, periodic intervals.
This type of structure gives managers the flexibility to invest in assets or execute investment strategies that are less liquid and better suited for a longer holding period – strategies generally only available to institutional investors, according to American Beacon.
The fund’s sub-advisor, New-York-based Sound Point Capital, focuses its strategy on preserving capital in all market conditions and generating attractive rates of return with low volatility. Sound Point employs a fundamental, bottom-up approach to investing opportunistically in the credit markets.
The exact mix of assets in which it invests will be flexible and responsive to market conditions; however, Sound Point will focus primarily on a variety of credit-related instruments, including corporate obligations and securitized and structured issues of varying maturities, which includes fixed and floating-rate securities and bank loans.
Total operating expenses for Y shares are expected to range between 1.61% and 2.17%. Y shares require an initial $100,000 investment, but that can be achieved with aggregated purchase orders for more than one client, according to the prospectus.
Brown Brothers Harriman Launches BBH Income Fund
Brown Brothers Harriman & Co. launched the BBH Income Fund (BBNIX), an open end mutual fund seeks to provide maximum total return with an emphasis on current income, consistent with the preservation of capital and prudent investment management.
The fund seeks to achieve its investment objective by investing in a well-diversified portfolio of fixed income instruments, using a value-oriented approach.
The fund’s investments will primarily focus on notes and bonds issued by domestic and foreign corporations, financial institutions, the U.S. Government, government agencies and government guaranteed issuers, asset-backed securities (ABS), commercial mortgage-backed securities (CMBS), residential mortgage-backed securities (RMBS), and loan transactions.
The fund will invest without limitations on the range of maturities of the debt securities it purchases and may hold securities with short-, medium- or long-term maturities.
Under normal market conditions, the fund is expected to achieve a duration (sensitivity to changes in interest rates) between 80% and 120% of the broad investment grade market, as represented by the Bloomberg Barclay’s US Aggregate Index.
Annual operating expenses, after initial fee waiver, are 070% for N shares and 0.50% for I shares, according to the fund’s SEC filing.