View more on these topics

Defaqto on Schroders’ strategic bond fund

View of Defaqto insight analyst for funds Fraser Donaldson

Donaldson says: “This fund was launched for specialist fixed interest fund manager Gareth Isaac. Gareth previously ran highly rated fixed-income funds at GLG. He is supported by Bob Jolly, who is head of global macro at Schroders and the named alternate manager. In terms of resource they have 100 investment professionals they can call on, including 30 portfolio managers and 30 credit analysts, based around the world.

“This resource means that the fund is a global fund. It is benchmark unconstrained, which means that depending on current views, it can have exposure to sovereign debt – both developed and emerging market – and corporate debt – again both developed and emerging market. In terms of investment grade, it can also hold anything from investment grade through to high yield.

“The fund itself will be at least 80 per cent hedged back in to sterling, which removes much of the currency risk. Derivatives can be used to help limit downside risk, as well as for taking either long or short positions, depending on views. In terms of fixed interest, and being unconstrained, the fund has the tools to respond to market circumstances.

“Fixed income is a very diverse asset class, with different grades and geographies behaving in different ways to market conditions. Using a strategic bond fund means that the choice of being in fixed income has been taken by the financial adviser, but crucially the decision making around which sub-class of fixed interest is left to the fund manager, a specialist in the field.

“By their nature, there will always be fixed-interest funds that outperform strategic bond funds in the short term, as they will at times be invested in the right area. However, over time, because of their diverse nature and hopefully good strategic moves around the sub-classes, there is a good chance that strategic bond funds will outperform over the longer term.

“For those IFAs considering this kind of fund, the fund managers have the pedigree and there is certainly no doubt about the research resource at Schroders. As such, and although a new fund, it is one that is certainly worthy of consideration.”

Recommended

FSA fines used car firm £91k over PPI sales

The FSA has fined a used car sales company £91,000 for failures in the way one of its brands monitored the sale of payment protection insurance. UK Car Group has been fined in relation to its Carcraft brand, which describes itself as the “UK’s leading car supermarket”, for failing to monitor Carcraft’s PPI sales between […]

6

Prudential Regulation Authority to be based in Moorgate

The Prudential Regulation Authority’s new headquarters will be in Moorgate and cost up to £1m a year more than remaining at its current Canary Wharf base. The Bank has signed contracts for 20 Moorgate until 2027. It says the annual extra costs of the property will be “less than £1m per year over the next […]

Aegon calls for one year Sipp disclosure delay

Aegon is warning the successful implementation of the RDR will be put at risk unless the FSA delays Sipp disclosure requirements by “at least a year”. In March, the regulator outlined plans to increase disclosure requirements for personal pension operators. The changes, which are due to be implemented by the end of this year, will […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment