Bestinvest says
The fund has quickly established itself as an investor favourite following strong performance during the credit crisis and the ensuing period. Relative to IMA Strategic Bond peer group funds the manager is more at home employing derivative instruments to manage risk and generate return. Like many strategic bond funds there is no yield target, so this fund may not be suitable for investors who have income as a priority.
The investment strategy for the fund will follow the house ' big picture' view set by the global strategy team. More micro fixed income asset allocation decisions will be the responsibility of the portfolio manager drawing on best ideas from the global fixed income teams. The portfolio is constructed using a risk budget equivalent to the Value at Risk for the Iboxx Sterling Bond Index, a UK quality corporate bond index. The manager will make use of credit and interest rate derivatives to finesse portfolio risk and add value. Returns are expected to be derived in order of importance from asset allocation / sector themes, credit spreads, duration, yield curve positioning. The net duration position of the fund maybe negative, allowing the fund to benefit from falling prices.