Old Mutual Asset Managers (OMAM) has added credit default swaps (CDS) to its dynamic and corporate bond funds, Citywire reports. The move will allow the £38 million Dynamic Bond fund manager Christine Johnson to change the risk profile of the fund without taking on absolute default risk.
OMAM may eliminate the CDS hedge on some of its high yield exposure, in case the Greece parliament votes in the austerity measures, said Johnson. The CDS can be used instead of cash bonds whenever there is an inflection point in the market, she added.
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