Nine funds to weather the bond storm

share certificates

A selection of investment choices offering exposure to bonds and mixed assets from our two investment panels.

Why the boom is over for bonds in 2017

BOND FUNDS

TwentyFour Dynamic Bond

Flexible income

Money Observer Rated Fund tickOur panel stress the importance of picking a fund with a flexible approach, given that fixed income markets are laden with pitfalls.

With that in mind, half of our bond tips, including TwentyFour Dynamic Bond, are go-anywhere bond funds.

John Husselbee says that TwentyFour are bond specialists, whereas other managers attempt to be jacks of all trades - and most often fail.

M&G Global Macro Bond

Flexible income

Money Observer Rated Fund tickRob Burdett and Brian Dennehy both note manager Jim Leaviss's experience.

The M&G Global Macro Bond fund has a broad mandate, so Leaviss is well-placed to deal with whatever the future holds when quantitative easing ends.

Dennehy adds that he has also had considerable success in playing currency trends.

Vontobel TwentyFour Absolute Return Credit

Tactical pick

This may be an unfamiliar name to many, but is something of a 'hidden gem' with around £100 million of assets under management, argues Jason Broomer.

He describes Vontobel TwentyFour Absolute Return Credit as relatively low-risk and tips the fund to perform well even if the 35-year bond bull market draws to a close.

L&G Global Inflation Linked

Tactical pick

With the spectre of a higher inflationary environment on the horizon in 2017, it will pay for investors to get ahead of the game with some insurance-type funds.

L&G Global Inflation Linked is an inflation-proof option, according to Mick Gilligan, as it holds a portfolio of non-UK government index-linked bonds. 'The fund offers an attractive hedge against inflation,' he adds.

L&G Short Dated Bond

Tactical pick

Those who think 2017 will be the year when interest rates rise for the first time since 2009 should look towards L&G Short Dated Bond.

While the consensus view is that a rise is unlikely, a sharp spike in inflation could force the Bank of England's hand.

This fund holds a portfolio of high-quality sterling corporate bonds, with relatively short underlying bond maturities.

MULTI-ASSET

F&C Multi Manager Navigator Distribution

Growth

Rob Burdett has opted for one of his own multi-manager funds, and we agree F&C Multi Manager Navigator Distribution represents a solid choice.

Since launch in October 2007, it has paid out more income than any other in the Investment Association's mixed investment 20-60% shares sector. It is also top quartile for total return since launch.

Miton Cautious Multi Asset

Income and growth

Alan Steel, praises Miton Cautious Multi Asset's fund manager David Jane's ability to shield capital in volatile market conditions.

'Jane looks to provide an increasing income over three to five rolling periods, with a bit of capital growth on top.' He has been avoiding 'bond proxies'.

Personal Assets IT

Defensive growth

Personal Assets trust is noted for its emphasis on capital preservation. As a result, it missed out on much of the bull market.

Peter Hewitt expects its substantial exposure to US and UK index-linked securities and gold bullion to prove their worth, as and when stock markets suffer a major setback.

RIT Capital Partners IT

Core growth

Money Observer Rated Fund tickThe managers of RIT Capital focus on protecting capital in difficult times as well as seeking to capture the upside in markets.

Jan Matterson says its long-term success has come from a distinctive blend of individual equities, private investments, equity funds and currency positioning, plus macro exposure management.

MEET OUR FUND PANELLISTS

Robert Burdett

Robert Burdett began managing funds of funds at Rothschild and then Credit Suisse. In 2007 he joined Thames River to help set up its multi-manager business, later taken over by F&C.

Brian Dennehy

Brian Dennehy is managing director of advisory firm Dennehy Weller. In 2012 he launched FundExpert, a fund platform for self-directed investors looking for fund research.

Mick Gilligan

Mick Gilligan is a partner in private client stockbroker Killik & Co. He is currently head of research. He analyses funds and trusts and manages the firm's multi-manager portfolio service.

Jason Broomer

Jason Broomer has more than two decades' experience in fund research and running portfolios for private clients. He runs Square Mile's managed portfolio service.

John Husselbee

John Husselbee is head of the Liontrust multi-asset team. He has 25 years of experience in managing multi-manager portfolios, including at Henderson and Rothschild.

Alan Steel

Alan Steel became an IFA in 1973, and launched his firm Alan Steel Asset Management in 1975. It now advises over 2,000 families, with more than £1 billion under management.

MEET OUR INVESTMENT TRUST PANELLISTS

Alan Borrows

Alan Borrows is a senior fund manager at Liverpool-based Seneca Investment Managers, which favours a value-oriented approach to multi-asset investment.

Jean Matterson

Jean Matterson is a partner at Edinburgh-based Rossie House Investment Management, which has long favoured investment trusts for private client portfolios.

John Newlands

John Newlands has overall responsibility for investment trust research at Brewin Dolphin. It has £33 billion under management, of which over £4 billion is in investment trusts.

Tim Cockerill

Tim Cockerill is investment director of Bristol-based Rowan Dartington which has client assets in excess of £1 billion. Investment trusts have featured in its portfolios for many years.

Andrew McHattie

Andrew McHattie runs The McHattie Group, an authorised firm which publishes a specialist investment newsletter. He has been the editor of Investment Trust Newsletter since 1966.

Peter Hewitt

Peter Hewitt has run the F&C Managed Portfolio trust since 2008, having managed its forerunner, F&C Managed Portfolio Service, since 2002. He previously worked at Ivory & Sime.


Subscribe to Money Observer magazine

 

Comments

Post new comment

The content of this field is kept private and will not be shown publicly.
By submitting this form, you accept the Mollom privacy policy.