Fund Objective

To achieve both capital growth and income.

View on Past Performance

The fund underperformed its benchmark over the period. Its holdings among different maturities detracted from its performance. Selecting among individual bond issuers also hurt returns. This was largely because of circumstances associated with particular companies. However, the fund benefited from its overweight positions in lower-rated non-government securities.

Future Expectations

An improving economic outlook has recently led to lessened demand for bonds. Concerns about inflation and rising interest rates pose the primary challenges to fixed-income markets in the UK. Gilts are especially vulnerable to further interest rate hikes, but reduced issuance (and therefore a smaller supply) should provide some support in the year ahead.

Fund Details