OPM Fund Management has used new money coming into its fixed-interest fund to top up its exposure to high-yield and investment-grade corporate bonds.
OPM has taken advantage of the recent stockmarket correction to top up its high-beta positions.
The returns from high-beta assets tend to follow the returns of the market while returns from low beta assets tend to move in the opposite direction to market returns.
Increasing exposure to high beta or positions where the returns are more sensitive to market movements enables OPM to benefit from the bond price rises that tend to follow stockmarket falls.
OPM has topped up its investment in Invesco Perpetual’s monthly income plus fund, which tends to be more correlated with equity markets over the short term. OPM likes the fund’s asset mix and believes it will perform well.
The firm has also topped up the Threadneedle high-yield bond fund to maintain its high-yield bond exposure while adding to investment-grade corporate bonds through the Rathbone ethical bond fund.
Chief investment officer Tony Yousefian says: “We do not think recent events could be a massive game changer, with the exception of the high oil price. If it stays at $100 a barrel for any substantial period or even higher, that could preset a problem and we will rethink our strategy.”