The World Bond Fund is a core bond strategy that invests in fixed-income securities and currencies across the developed and emerging markets. The fund seeks to capture the importance of debt sustainability dynamics for government bond market returns, while attempting to generate higher yield and lower volatility compared to traditional funds.
“Interest rates in developed countries are being held down by central banks in an attempt to generate economic growth,” said Jonathan Beinner, co-head of GSAM Global Fixed Income and Liquidity Management and chief investment officer. “This has led to negative real yields in developed government bond markets and increased risk of currency depreciation. Recent events have also exposed weaknesses in developed markets. These developments are driving investor appetite for core fixed-income products that offer global exposure and combine higher yield and currency appreciation with lower volatility.” (See “Head of the Class: Going Global”)
The fund is benchmarked to the recently launched Barclays Global Sovereign Fiscal Strength Index, which incorporates elements of the Barclays GDP and Fiscal Strength indices and combines them with a GSAM-developed methodology that favors countries with strong fundamentals over those under some form of fiscal stress.
“By benchmarking the Goldman Sachs World Bond Fund to a GDP-weighted index that incorporates a debt sustainability adjustment, we are seeking the best fixed-income investment opportunities resulting from this global structural shift,” said Michael Goosay, managing director, GSAM US Fixed Income Team.
The fund allocates primarily to global sovereign bonds and sovereign-related debt. Its currency exposure is unhedged. It is offered in Class A and Class C Shares, both with $1,000 minimum initial investments. The fund also offers Institutional, Class R and Class IR Shares.