Fund Objective

There is no fund objective available from this fund manager.

View on Past Performance

In January, corporate bonds posted their worst return versus government bonds in over a decade. Further writedowns by banks caused by their sub-prime exposure and the loss of AAA ratings by some of the monoline insurers drove risk premiums higher.An unscheduled meeting of the Federal Reserve led to an interest rate cut in the US by 0.75%. A further cut of 0.5% at the end of the month provided the market with a bit of support, but corporate spreads still finished the month 10% wider.

Future Expectations

By reducing interest rates by 1.25%, the US Federal Reserve has shown that it is prepared to take decisive action to support the US economy and ease pressure in the credit markets. However, while the uncertainty regarding the rating of monoline insurers continues, the banking sector will remain under pressure and this is likely to be the biggest driver of credit in the short term.

Fund Details