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Thames River shifts to strategic bonds

Thames River’s multi-manager team has moved further into the strategic bond sector, citing greater opportunities than in the corporate bond area.

The team, headed by Gary Potter and Robert Burdett, believe corporate bonds still represent good value but the opportunities are not as strong as they were six to nine months ago.

Potter and Burdett have removed a third of their 36 per cent exposure to corporate bonds in the cautious managed fund, almost half of the 20 per cent exposure in the distribution fund and a quarter of the 27 per cent exposure in the distribution fund.

The team has just passed £300m of assets under management and the strategic funds they have invested in include the Henderson strategic bond fund, managed by John Pattullo and Jenna Barnard and the Cazenove strategic bond, managed by Peter Harvey.

Potter says: “We want to look past the next six to nine months and the most value appears to be in those portfolios that have a full spectrum to invest in. We want those funds with the flexibility to use Ucits, use government bonds and tap into high yield. Strategic funds can do all that so the value is there.”

Skerritt Consultants head of investments Andrew Merricks says: “We have been in strategic bonds since the early part of 2009 after coming out of investment-grade.

“We have seen a quick change from cash to gilts, gilts to AAA/investment-grade but it was clear that once it appeared that this was not the end of the world, the strategic space looked a big opportunity and we are happy to stay there.”

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