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‘Staggering returns’ from corporate bond funds

Tora Partnership principal Brian Tora believes the diversity in yields has made fixed interest one of the most exciting areas of the market.

Tora says the credit crunch has driven lots of money into safer areas of the market and made corporate bonds look much riskier, hence the yields being so much greater.

He said: “You can pick up some absolutely staggering returns from some corporate bond funds at the moment and they are worth looking at but you have to be aware of the higher risk factor and levels of failure that come along with these yields, given that some of these money market funds that have these complex instruments have been involved in the credit crunch.”

Tora said he has recently bought into the Invesco Perpetual leveraged high-yield bond fund which operates at the junk end of the market.

He said: “I am buying this for yield but with a sensible house behind it and I think there are a number of bond funds like that.”

Thames River co-head of multi-manager Gary Potter says: “The biggest thing with investment-grade corporate bond funds is liquidity because many of these issues in funds cannot be solved, so if a manager gets big redemptions they cannot sell them, as no bank will take them on their books.”


‘Midas investors will reap long-term rewards’

The Midas funds have suffered a setback in performance because their overseas prop-erty holdings have continued to trade at a discount to net asset value. High volatility has also affected the quoted value of some structured holdings and a preference for value stocks has hurt as these have been hit by the credit crunch.

India GDP surprise

By Kunal Desai, head of Indian Equities, Neptune Kunal Desai, manager of the Neptune India Fund, comments on the strength of India’s latest GDP figures. Click here for more Important Information Investment risks The Neptune India Fund may have a high volatility rating and past performance is not a guide to future performance. The value […]


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