Henderson strategic bond fund manager John Pattullo says the strategic bond sector has the potential to rival the corporate bond sector in size on a five-year view.
IMA figures at the end of September show funds under management for the strategic bond sector totalled £16bn compared with the £43bn corporate bond sector and the £6bn high-yield sector.
Pattullo’s £675m fund, which is co-managed with Jenna Barnard, saw inflows pick up in November and is taking at least £1m net daily, with £200m already taken this year. Pattullo expects the fund to deliver a 10-15 per cent return next year.
He says: “A lot of people are launching strategic bond funds. The more the better. We want the sector to grow and be bigger than the investment-grade sector. I would hope on a five-year view that they would be similar sizes. The money should be more permanent because if the client is happy with what we are doing, we should be able to asset-allocate for them throughout the cycle and free their time.”
Hargreaves Lansdown investment manager Ben Yearsley says: “Strategic is more suitable for the average retail investor than investment-grade because it can move around and take advantage of the best opportunities.”