The LOM Financial Group this week announced the launch of a new fixed-income mutual fund investing in sterling-denominated bonds.

The LOM Fixed Income GBP Fund will be managed by LOM Asset Management, the investment management subsidiary of LOM Financial which currently manages the LOM Fixed Income USD Fund and the LOM Fixed Income Euro Fund.

The asset management team will actively manage the portfolio utilising its technology enabled intra-dealer electronic trading platform; active duration targeting and credit research will be employed to augment portfolio returns. LOM Asset Management has earned top five-star Morningstar ratings on its USD Fixed Income fund.

Bryan Dooley, senior portfolio manager with LOM Asset Management Ltd, said the new fund allows investors the opportunity to invest in a fixed income market which still provides positive income yields and to participate in a currency which is not directly correlated with the US dollar.

Sterling gives investors exposure to the European area without direct exposure to the euro. Over the last year the pound has risen more than 11 per cent against the euro and the UK economy is growing at about the same rate as the US.

“Moreover, interest rates are now actually negative in many European countries including France, Germany and Switzerland, a factor which could ultimately increase the relative attractiveness of sterling-based bonds within the Western European region,” LOM stated.

“While the fund initially appeals to investors with current liabilities in sterling or those with future plans to spend pounds, other investors may see the new fund as a strategic currency play.”