Fund Objective

To produce income and capital growth by investing in UK fixed interest securities (which includes corporate bonds) and Gilts (with the provision to invest up to 15% of the portfolio in fixed interest securities outside the UK).

View on Past Performance

Spreads continued to drift nervously over the quiet summer months in anticipation of new supply. Overall though, yields fell with the lower oil price which reduced inflationary pressures, allowing the market to start pricing in rate cuts in the coming months. The fund returned 1.2% which was slightly behind its sector average

Future Expectations

Spreads continued to drift nervously over the quiet summer months in anticipation of new supply. Overall though, yields fell with the lower oil price which reduced inflationary pressures, allowing the market to start pricing in rate cuts in the coming months. The fund returned 1.2% which was slightly behind its sector average.The OECD has forecast that the UK will dip into recession in the second half of the year, with GDP expected to contract by 0.4% and 0.3% respectively over the next two quarters.We believe this will force the Bank of England to start cutting rates as soon as inflation peaks in October - this could be followed by five more cuts over the next year. Activity on the fund was low in August: we reduced exposure to insurance, which had held up well relative to other financial sectors.

Fund Details