Forsyth Partners, the research and investment management company, has added the Forsyth global bond fund to its product range.
This is a fund of funds that aims for growth by investing in funds that focus on fixed-interest securities. It will initially have a concentrated portfolio of around 13 funds. Some of the funds contained within the portfolio include Aberdeen international high yield, M&G corporate bond fund, MS Sicav US high yield bond fund and Ashmore emerging market liquid investment. It is unlikely that the portfolio will contain more than 15 funds.
The fund manager will take a top-down approach when selecting funds. Factors such as interest rates and government policies will first be analysed. The next step is to highlight funds that reflect the fund manager's views of the bond market. The fund of funds manager will ensure that the portfolio contains lower-risk gilts, but will focus on finding opportunities in corporate bond funds and emerging market bond funds to boost overall returns.
Investors who are choosing bond funds to escape the volatility of stocks and shares could find this fund of interest. As a fund of funds which invests globally, it gives investors more diversity than a single fund that may focus only on UK investment-grade bonds or European high yield bonds.
Investors can also switch between fund managers, so if a fund fails to perform or its star fund manager moves to another company, it can be easily substituted with another with better performance. However, there is an element of double charging with the fund of funds approach and this could put some investors off.
According to Standard & Poor's, the Forsyth global equity fund is ranked 216 out of 541 funds based on £1,000 invested on a bid-to-bid basis with gross income reinvested over one year to December 21, 2001.