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Sterling Strategic Bonds

Update 9th December 2011: If you sort the table by ‘One year cumulative value’ and order by ‘Best Performing’ you can glance along the row to see performance over various periods. What we are looking for is consistency of performance.

 

Strategic Bond funds have a wider investment remit than a plain vanilla corporate bond fund, and in 2011 some invested heavily in high yield bonds. Investment risk has thereby increased without this being visible to investors, or well understood by advisers. If there is a banking crisis (it is negligent to ignore this risk), it could get ugly and some Strategic Bond funds are more obviously in the firing line than others.

One straightforward way to spot funds taking more risk through high yield bond funds is to identify those with higher yields. Remember higher yields means higher risks. There are no exceptions. Fidelity Strategic Bond tops our table as it only has a 17% exposure to non-investment grade debt, among the lowest within the sector. The fund’s aversion to risk is reflected in its relatively low yield of 2.57%, compared to a sector average of around 4.85%.

Our experience is that Strategic Bond funds tend to be bought in volume when advisers and investors aren’t sure what is going to happen next, just like now. So they buy these funds in the hope the managers have a clue. Consider strategic bond funds by all means, but engage brain. The best of all of them will exploit their global remit and use all the tools at their disposal. JPM Strategic Bond, one of our long term picks, has used derivatives to minimise the near term risk, wanting to maintain the high yield holdings for their longer term attractions. In the current environment we would certainly be drawn to funds with less in high yield, and with clear evidence of outperformance. 

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Growth (%)
1 Month 6 Month 1 Year Monthly risk
Fund name Value Rank Value Rank Value Rank Value Rank
Allianz PIMCO Sterling Total Return TR in GB -0.51 43 8.24 24 5.34 28 2.26 32
Architas MM Diversified Bond Portfolio in GB 0.22 3 4.7 63 5.02 30 2.02 27
Architas Multi-Manager Cautious Income in GB -0.72 53 3.94 73 -1.51 67 1.71 17
Artemis High Income TR in GB -0.34 32 8.58 22 1.28 52 2.01 24
Artemis Strategic Bond in GB -0.59 46 8.91 16 -0.58 61 1.96 22
Aviva Inv Higher Income Plus TR in GB -0.86 59 9.26 12 2.52 43 2.19 31
Aviva Inv Managed High Income TR in GB -1.29 76 9.6 9 2.31 45 2.57 38
Aviva Inv Strategic Bond TR in GB -0.75 55 9.97 7 2.36 44 1.61 12
AXA Framlington Managed Income in GB -0.25 23 7.27 35 -0.62 62 2.74 45
AXA Sterling Long Bond in GB -1.04 68 6.36 45 19.04 4 4.68 62
AXA Sterling Strategic Bond in GB -0.26 24 5.3 57 11.63 12 2.96 49
Baillie Giff Corporate Bond TR in GB 0.01 8 9.07 13 6.68 27 7.26 69
Barclays Income Plus Portfolio in GB -0.62 50 6.44 43 3.97 38 2.72 42
Barclays MultiManager Sterling Bond S2 Henderson in GB -0.13 13 4.19 71 0 0 0 0
Barclays MultiManager Sterling Bond S2 Insight IMP in GB -0.16 16 4.5 68 0 0 0 0
Barclays MultiManager Sterling Bond S2 M&G IMP in GB -0.08 12 4.15 72 0 0 0 0
Barclays Sterling Bond in GB 0.17 5 5.82 51 14.05 6 2.82 47
BNY Mellon Global Strategic Bond TR in GB -0.28 27 2.85 75 4.07 37 0.96 4
Cazenove Income For Charities TR in GB -0.27 26 4.46 69 12.01 10 2.72 43
Cazenove Strategic Bond in GB -0.42 36 6.26 47 -0.79 65 3.2 51
CF IM Bond TR in GB -0.85 58 5.27 58 0 0 0 0
Chariguard Fixed Interest in GB -0.89 62 2.71 76 13.04 8 0 0
Ecclesiastical Amity Sterling Bond TR in GB -0.22 20 5.25 59 4.7 35 1.39 10
EFA OPM Fixed Interest in GB -1.17 72 6.33 46 -3.61 73 2 23
Elite Fitzwilliam Strategic Bond in GB -0.71 52 4.63 67 -0.66 63 1.37 9
F&C Extra Income Bond TR in GB -0.61 49 9.99 6 0.18 58 2.65 39
F&C Strategic Bond TR in GB -0.88 61 9.32 11 -0.02 59 2.42 36
Fidelity Extra Income TR in GB -1.08 70 6.99 38 4.96 31 1.69 14
Fidelity Inst Core Plus Bond in GB -1.03 67 8.99 14 19.77 3 3.77 57
Fidelity Strategic Bond TR in GB -0.53 44 5.89 50 7.1 24 1.65 13
GLG Strategic Bond in GB 0.09 7 0 0 0 0 0 0
Henderson Fixed Interest Monthly Income TR in GB -0.22 19 6.71 41 -0.54 60 5.92 66
Henderson High Yield Monthly Income TR in GB -0.15 14 6.93 40 -1.19 66 2.66 40
Henderson Preference & Bond TR in GB -0.2 18 7.2 36 -2.49 71 2.73 44
Henderson Strategic Bond TR in GB -0.16 15 7.45 32 -1.62 69 2.14 28
HL Multi Manager Strategic Bond in GB -0.01 11 7.33 34 3.92 39 0.69 2
Insight Monthly Income Bond TR in GB -0.32 30 7.99 27 3.72 40 7.3 70
Invesco Perp Monthly Income Plus in GB -1.04 69 9.88 8 -0.76 64 3.61 55
Invesco Perp Tactical Bond in GB -0.99 66 15.83 1 1.17 53 3.79 58
Investec Strategic Bond TR in GB -0.59 47 4.67 65 1.69 50 1.78 19
JPM Strategic Bond in GB -1.37 77 5.19 60 2 47 1.18 7
Jupiter Strategic Bond in GB -0.24 22 8.85 17 5.21 29 1.72 18
Kames Strategic Bond in GB -0.23 21 7.9 29 0.88 55 2.19 30
L&G Dynamic Bond TR in GB -0.4 34 9.5 10 -1.54 68 1.83 20
M&G Optimal Income in GB -1.17 71 8.15 26 7.66 23 1.15 5
M&G UK Inflation Linked Corporate Bond in GB 0.56 2 2.54 77 1.8 48 0 0
Marks & Spencer High Income TR in GB -0.27 25 7.98 28 6.92 26 6.41 68
Montello Income TR in GB 0 9 3.43 74 6.98 25 -0.37 1
Natwest High Yield TR in GB -0.75 56 8.69 19 4.75 32 2.02 25
NFU Mutual Gilt & Corporate Bond TR in GB -0.94 64 5.06 61 11.05 14 2.68 41
Old Mutual Dynamic Bond in GB -0.61 48 7.68 31 -2.65 72 3.35 52
PFS TwentyFour Dynamic Bond in GB -1.47 79 12.18 2 0.72 56 0 0
Premier Strategic High Income Bond TR in GB -1.6 80 4.3 70 -10.29 74 2.84 48
Rathbone Strategic Bond TR in GB -0.72 54 4.83 62 0 0 0 0
Rothschild RPIC Preferred Income TR in GB -0.97 65 2.33 78 0.93 54 1.21 8
Royal Bank of Scot High Yield TR in GB -0.75 56 8.69 19 4.75 32 2.02 26
Santander Bond Portfolio in GB -0.3 28 6.37 44 8.82 20 1.69 16
Santander MultiManager Bond Monthly Income in GB -0.41 35 6.06 49 9.38 18 2.34 35
Santander Premium Sterling Bond in GB -0.44 38 5.44 55 7.87 21 2.45 37
Santander Strategic Bond TR in GB -0.17 17 5.71 52 3.43 41 1.17 6
Sarasin Sterling Bond in GB -0.45 39 5.53 54 11.05 13 1.69 15
Schroder Charity Fixed Interest in GB -0.35 33 4.7 64 13.07 7 2.8 46
Schroder Sterling Broad Market Bd TR in GB 0.18 4 6.71 42 11.66 11 2.31 34
Scot Wid Strategic Income TR in GB -0.69 51 8.51 23 1.72 49 4.18 59
SJP Corporate Bond in GB -1.29 75 11.81 4 -1.9 70 3.68 56
Skandia Sterling Bond TR in GB -0.88 60 12.18 3 0.68 57 4.6 60
Skandia Strategic Bond TR in GB -0.32 31 8.94 15 4.29 36 6.16 67
Smith & Williamson Fixed Interest TR in GB -0.5 42 7.38 33 15.03 5 3.43 53
Stan Life Inv Strategic Bond TR in GB -0.47 41 7.79 30 7.67 22 1.83 21
Stan Life Inv UK Bond Manager Of Managers in GB -0.31 29 4.66 66 9.3 19 2.31 33
SWIP Strategic Bond in GB 0 9 8.58 21 2.11 46 0 0
Templeton Strategic Bond TR in GB -1.4 78 6.14 48 3.43 42 1.55 11
Threadneedle Strategic Bond TR in GB -0.9 63 8.24 25 1.45 51 2.18 29
UBS Active Bond in GB 0.11 6 2.12 79 4.75 34 0.96 3
UBS Broad Bond Market UK Plus in GB -0.54 45 7.08 37 9.52 17 3.12 50
UBS Fixed Interest UK Plus in GB -0.46 40 5.41 56 13.02 9 3.45 54
UBS Inflation Linked Bond UK Plus in GB 1.04 1 11.22 5 20.05 2 5.17 64
UBS Long Dated Corporate Bond UK Plus in GB -1.28 74 8.83 18 10.69 16 4.63 61
UBS Long Dated Fixed Interest UK Plus in GB -1.26 73 6.98 39 22.52 1 5.03 63
Virgin Income TR in GB -0.42 37 5.57 53 10.83 15 5.21 65

 




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