Jupiter strategic bond manager Ariel Bezalel has cut Australian government bond exposure in the £1.2bn Jupiter Strategic Bond fund and raised bank debt exposure as he adds risk into the fund.
Bezalel says the move follows the European Central Bank’s announcement in July that it will help stimulate the eurozone through an unlimited bond-buying programme.
He says: “To see ECB president Mario Draghi standing behind the bond markets was pretty significant, as he was standing behind the bond markets of Italy and Spain. So we cut back our ‘safer’ Australian government exposure.”
Bezalel reduced the fund’s exposure from 22 per cent to 12 per cent at the end of July and added high-yield debt, which stands at nearly 60 per cent, up from around 50 per cent.
He says: “It feels like central banks, the European Central Bank and the Federal Reserve are backstopping the market and so we want to be long risk for now.”
Hargreaves Lansdown investment analyst Richard Troue says: “Bezalel is being slightly more aggressive than other managers in the strategic bond sector.”