Bestinvest says
The fund has some similarities with Baring Global Bond, also run by Colin Harte, but differs in that it makes extensive use of derivatives including short positions. The concept is attractive for risk averse investors but the very high charges are a serious deterrent.
This product adopts an absolute return approach, with income of secondary importance to capital growth, there will be no traditional global bond benchmark for performance comparison purposes. Under this mandate the manager is able to use derivative financial instruments such as future and forwards to create negative duration positions and physically short currencies. This will enable the fund to potentially generate positive returns in rising as well as falling interest rate environments. Currency positions will be taken independent of bond positions; the manager anticipates that volatility in the world's currencies will be a major source of alpha for the fund. All short positions will be covered by cash in the fund.
There are no formal geographic restrictions on the region/currency of investment, although these will generally be OECD countries. The underlying investment process and structure of the fund will reflect the 3 to 4 economic scenarios identified to guide the construction of the existing Global Bond Trust. This diversification by strategy is designed to prevent over concentration of risk inherent in a single point forecast.