View more on these topics

Flight to quality for Legg Mason

Legg Mason Investors has established a global blue chip bond fund which aims for income and growth by investing in investment-grade bonds that are ratedA- or higher by S&P and other ratings agencies.

The fund will invest in high quality corporate bonds issued by blue-chip companies that are classified as senior securities. Senior debt has priority over other securities in a claim against the issuer or if the issuer goes bankrupt.

The fund may also invest in bonds issued by national government orgovernment agencies, but will not invest in emerging markets.

The fund is managed for Legg Mason by US-based fixed income specialist Western Asset, which was founded in 1971. Western Asset takes a team-based approach to portfolio management, comprising groups of specialists dedicated to the major areas of the fixed-income market.

They will provide information to manager Dipankar Shewaram that will enable him to build the portfolio with reference to sector, issuer, duration and maturity.

Shewaram and his team will focus on the most liquid bonds and as the fund is benchmarked against the Merrill Lynch 1-10 Year US Treasury TR Index, they have a lot of flexibility in where to invest. The portfolio will be diversified and not geared.

It will be constructed through bottom-up credit analysis combined with a top-down macro-economic view. The fund will be hedged to US dollars but sterling and euro hedged classes are available.

The portfolio currently comprises 69 holdings, the bulk of which are A rated, with some exposure to AA rated bonds, AAA rated bonds and cash. Over half of the portfolio invested in the US, while the UK has the next biggest regional weighting at almost 11 per cent.

This fund is looking to make money from the historically wide spreads in the credit market. Investment-grade bonds are pricing in a higher level of defaults than is expected to happen, so this fund can benefit from high yields at low prices without taking on the higher levels of risk associated with bonds that are lower down the quality spectrum.

However, many bond fund managers are taking advantage of the same opportunities, so the fund could face competition from established funds.


NDFA defines income

NDFA has brought out the fourth issue of its defined income plan, a five-year FTSE 100 linked structured product which provides monthly income.

Identifying best-in-class UK stocks — Mark Martin, Neptune UK Opportunities Fund

FE Alpha Manager Mark Martin assumed management of the multi-cap UK Opportunities Fund at the beginning of February. As manager of the highly regarded UK Mid Cap Fund, Martin has begun restructuring the new portfolio to focus on our very best UK stock ideas from across the FTSE All-Share Index. In this video, update Martin addresses:

– Themes informing the UK Opportunities Fund
– The multi-cap structure of the fund
– UK equity valuations


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm