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Govett believes in bond renaissance

Govett Investments&#39 belief that corporate bonds will enjoy a renaissance has led to the introduction of its corporate monthly income fund.

This Dublin-based Ucits aims to deliver income with a target yield of 7.75 per cent a year and opportunities for capital growth.

It will consist of UK gilt-edged securities and fixed interest securities in the UK and overseas. Although the emphasis will be mainly on investment grade bonds, up to 20 per cent of the fund can be invested in non-investment grade bonds.

The fund could appeal to higher rate taxpayers who are looking for monthly income with the tax advantages associated with offshore investments. However, it is not a good time for corporate bonds at the moment as yield rates are very low and investors can get yields of up to 10 per cent from guaranteed equity bonds.

According to Standard & Poor&#39s the Govett GSIL high income fund is ranked 62 out of 82 funds based on £1,000 invested on a bid-to-bid basis with gross income reinvested to November 6, 2000.

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