Alliance Trust is considering launching a target return bond fund and has dropped plans for a strategic bond fund.
The firm currently only has one offering in the bond sector, the £216m monthly income fund, which launched last June.
Head of fixed income Rod Davidson says: “We have been reviewing a fixed income launch. It may be target return rather than absolute return. We have looked at a lot of strategic bond funds and realised many of them were just beta credit plays.
“This means they perform well only during a certain per-iod and we are not sure if they are really strategic funds. High-yield exposure dilutes the financial components of those funds.”