View more on these topics

Pure bond funds see ‘marked fall’ in investment


Pure bond funds have fallen out of favour with UK investors over the last year, according to Alliance Trust Savings, which has listed its best selling funds funds for 2016.

There were none that appeared in the top 10 list, compared with the tax year end (1 March to 5 April 2016) when the Aviva Investors High Yield Bond fund, Fidelity Global High Yield fund and AXA Global High Income fund were all top sellers.

No pure bond funds appeared in the list for the full year.

Instead the Fundsmith Equity fund was the top seller, following by Vanguard LifeStrategy 60% Equity fund, one of five from the passives giant to feature in the top 10.

The Woodford Equity Income fund, which rounded out the top three, was the only active UK equity fund. The Vanguard FTSE UK All Share Index was the only other UK focussed fund in the list.

Alliance Trust Savings head of platform proposition Sara Wilson says: “There has been a marked fall in investment into pure bond funds, although sales of mixed investment funds, which spread money across stocks and bonds, have held up well. 

“In the immediate aftermath of the Brexit vote, we saw increased trading on the platform. Investors mainly saw the decision to leave the European Union as a buying opportunity, reviewing their portfolios to ensure their investments are best placed to deal with ongoing market uncertainty.

“We’ve seen global funds increase in popularity as investors seek to diversify their holdings away from UK focused holdings.”



Fed rate hike talk causes uncertainty for bond leaders

The Federal Reserve’s projected number of rate hikes for 2017 is “puzzling” according to Pimco’s global strategic adviser. At yesterday’s meeting, the Fed raised rates by 25 basis points to a range of 0.5 per cent to 0.75 per cent with a unanimous vote, as anticipated by the market. At the same time the FOMC […]

Preparing bond positions for a post-Trump era

Like many people, my knowledge of US politics is driven somewhat by the excellent TV series The West Wing. While watching Donald Trump’s victory speech, it certainly felt like another Netflix blockbuster coming to a climactic end. Unfortunately, we  need to pinch ourselves as the new series is just beginning. When Trump states he wants […]


Get ready for the bond fund redemption wave

Bond firms face a liquidity crunch as fund managers are being urged to prepare to meet redemption requests if there is a sharp sell-off. A recent report form ratings agency Fitch warned of a mismatch within open-ended bond funds offering daily liquidity while holding less liquid securities. The report says the likelihood and impact of […]

Martin Foden discusses how convenience is affecting the construction of fixed income portfolios

In this short video, Martin Foden, head of credit research at Royal London Asset Management, discusses how convenience is affecting the construction of fixed income portfolios. Watch the video in full The value of investments and the income from them is not guaranteed and may go down as well as up and investors may not […]


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 thought leadership.

    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