Fund Objective

Aims to provide a return by investing primarily in sterling denominated investment grade corporate bonds.

View on Past Performance

Corporate bond spreads hit an all-time high in September, with the spread on the iBoxx Non-Gilt index widening 63 basis points (bp) to 249bp. A lack of trust in the financial health of all types of financial institutions led to the US government having to nationalise mortgage companies Fannie Mae and Freddie Mac.This was the start of a run of events that saw several bankruptcies and bailouts on both sides of the Atlantic, resulting in corporate bond spreads trading at all-time highs and a degree of fear and uncertainty overhanging the market.

Future Expectations

Following an unprecedented few weeks of turmoil in the markets and financial institutions in particular, uncertainty abounds as to both the success of the rescue package in the US ('TARP') and its implications for the economy generally. Our view on financials is that they will be more regulated, face impairment to their business model and confidence between them will remain fragile.

Fund Details