Federated Investors Inc. this week kicked off a bond fund that invests in high-yield, short-duration securities and is aimed at the trust department market.

Federated Ultrashort Bond Fund invests in a variety of debt securities, including corporate, government, mortgage, and asset-backed bonds.

The duration of the portfolio cannot exceed 12 months. Its investments may include foreign bonds as well as futures, options, and swaps.

The fund is being promoted to portfolio managers in bank trust departments, as well as to corporate cash management account managers in capital markets and treasury departments, said Timothy C. Pillion, Federated's global sales director. "In this environment of declining interest rates and low inflation, people are looking for more effective ways to maximize their returns."

About $70 billion of the $103 billion of assets under management at Pittsburgh-based Federated is in short-term cash investments.

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