SG Asset Management has added four fixed-interest funds to its Oeic range following the conversion of its unit trusts to Oeics.
The SG Sterling bond fund aims to provide income by investing mainly in UK government bonds. The SG Long-dated corporate bond fund aims for income by investing in investment-grade sterling denominated bonds with a maturity date of over 10 years. The SG index-linked fund aims to deliver income by investing in UK government index-linked bonds and other government-related bonds. All three funds are managed by Paul Rayner and Stephen Pierce.
Rayner joined SG Asset Management in 1998 from Hambros Bank, where he spent 15 years specialising in fixed income fund management. Pierce started his career at Teachers Provident Society in 1994, where he was responsible for fixed income, cash funds and asset allocation. At SG Asset Management his main responsibility is managing corporate bonds.
The SG international bond fund aims for above average income by investing globally in fixed-income securities outside the UK mainly in government bonds but may invest in corporate bonds. It is managed by Brigitte Le Bris, who joined SG Asset Management in 2000. She previously worked for Credit Lyonnais, Banque Bruxelles Lambert and CDC Asset Management.
Bond markets have performed well relative to equities over the past few years. However, with the global recovery gathering pace and interest rates rising, investors are returning to equities. Bonds may currently look expensive because the prices may have further to fall, particularly if the US starts to raise interest rates.
However, bonds are less volatile than equities, particularly the Government and investment-grade corporate bonds that the SG Asset Management bond funds focus on. While these funds are unlikely to achieve high returns, they could bring diversification to a portfolio that investors may tilt towards equities.