| LONDON, April 19
LONDON, April 19 British hedge fund manager Man
Group is developing a computer-driven government bond
fund, aiming to attract investors put off by the ultra-low
yields in many developed fixed income markets and worried about
further debt defaults.
The Man Systematic Fixed Income fund, yet to be launched,
will try to identify and profit from dislocations in liquid
government bond markets.
"Traditional fixed income investing (is) unattractive,"
Man's Systematic Strategies unit said in a note, citing "yields
close to zero percent, increased credit risk in many government
bonds, (and) little upside (and) big downside of being long
bonds in (the) current environment.
"Market inefficiencies (are) likely to prevail in fixed
income markets, creating investment opportunities."
A spokeswoman said on Thursday MSS was working on the fund
and declined to give a launch date.
Investors have grown nervous over a number of government
bond markets during the euro zone's debt crisis, which last
month saw Greece win acceptance from private creditors to avoid
an uncontrolled default.
Fears the global economy could worsen and concerns over the
bonds of peripheral euro zone countries have seen yields on
German five-year bonds, viewed by many investors as a
safe haven, fall to 0.65 percent and yields on U.S. five-year
bonds fall to 0.83 percent.
The fund will be the fourth portfolio run by Man's one-year
old MSS unit, which manages $1.6 billion assets.
The unit is run by Sandy Rattray, who co-developed the VIX
volatility index, also known as the "fear index", widely
used to measure investors' perception of risk.
Last month Man announced the launch of the Man Commodities
fund, also run by MSS, which uses algorithms to trade 25
commodity futures contracts and also allows human intervention.