Threadneedle to launch asset-backed income trust

Threadneedle is aiming to raise £200m for the launch of its Asset Backed Income investment trust, set to list in October.

The trust will target a net yield of 6%, distributed quarterly, and a total return of 7% to 10% per year, via a portfolio of asset backed securities. It will invest primarily in short-duration floating-rate notes in an attempt to hedge against future interest rate rises. Manager Henry Cooke, currently the firm's European head of secured credit, said the asset-backed securities (ABS) sector had finally begun to shake off its tarnished image following the US real-estate meltdown in 2007. "Since the financial crisis a number of areas of fixed income have rallied providing investors wi...