Anderson took over the £217m portfolio in December 2011 and was ahead of the average fund in the IMA Sterling Corporate Bond sector until the turn of the year.
However, he now trails the sector since he took over the fund, but says he will not be upping his risk to try to catch up.
Performance of fund vs sector since Dec 2011
Source: FE Analytics
"Over the past year we have lagged the peer group because we stayed away from peripheral Europe," he said.
"We do not hold any European bonds at all, it’s just too risky. Not holding European bonds counted against us in January when they were rallying strongly, but Cyprus was a wake-up call."
Despite his caution on European bonds, the manager thinks that the eurozone’s debt issues are unlikely to lead to such severe crises as they did in the past, as investors brush off worries around Cyprus and Italy.
"Italy and Cyprus have had a limited effect. I don’t want to say no effect, but it has been negligible compared with past crises."
"Eighteen months ago you would have seen yields spike out as they did in the summer of 2011 during the second Greek crisis."
"We would have expected to have experienced that again, but we haven’t, so something historically hasn’t changed."
"People have come to terms with the fact that interest rates will stay low for longer. People are still in credit thanks to the desire for yield."
"There was some fall in fund flows at the start of the year. A lot of bond funds saw falls, but that situation has stabilised."
"However, it’s got to be said that one of the reasons markets are so firm is that the higher liquidity means people are not selling out of fear that they will not be able to buy those stocks back."
Anderson is not the only high-profile manager to lag over 12 months. FE Alpha Managers Ian Spreadbury and Richard Woolnough sit in the fourth quartile of the sector over that time frame, according to data from FE Analytics.
Performance of funds vs sector over 1yr
Source: FE Analytics
Spreadbury’s £3.3bn Fidelity Moneybuilder Income fund has made 10.57 per cent over the past year, while the £6bn M&G Corporate Bond fund has made 9.55 per cent. The sector has made 11.65 per cent.
Anderson says that he is going to retain his cautious approach on valuation grounds, despite being relatively unconcerned about the effect of the crises on the markets.
"If you ask me why I am cautious if I am so sanguine about the risks to the market, then I would say that there’s a limit to how much the market can rally from here," he said.
"I have always said that the euro is a political project and a political problem and you will have political solutions."
"Anybody who wants to read the mind of politicians, good luck to you."
"I do not think the Europe crisis is going away, so you need to be cautious about the political consideration."
In the UK market, Anderson sees no cause for alarm and no sign of a rotation into equities.
"The situation in the market is stable. Some people find that worrying, that the low volatility is the calm before the storm, but I think the glass is half full," he added.
"Gilt yields have done the 'Grand Old Duke of York' this year. They sold off due to fears of a great rotation but that did not happen and 10-year gilt yields went from 1.7 to 2 per cent and back again, so basically unchanged for the year."
"Stability has been the key word. We did have a rally in the first part of January and then it reversed. Corporate bond spreads have been 'grinding in'."
"There were fears of higher interest rates at the start of the year but nobody is talking about that at the moment."
Anderson thinks the effects of the recent UK downgrade will also be limited, although the likelihood of QE and the uncertainties around the possible adoption of a growth target for the Bank of England mean he is shortening the duration on his fund.
"Any future QE will start to raise fears about inflation and how much of the gilt market the BoE owns, so we have shortened the duration from seven to 5.75 years because of the greater uncertainty."
The manager remains overweight financials, and is moving into riskier UK financial debt thanks to rising valuations.
"We have preferred senior debt and we weren’t alone. Spreads on seniors have started to rally, so much that they have now traded through industrials in the UK. How sustainable is this? Are banks safer than industrials?"
"Banks still have some risks and we do not believe that senior bonds have any value, so we are going to lower tier 2 bonds – not tier 1, which is too risky."
The manager has moved from A rated bonds into BBB and increased his weighting to financials while steering clear of utilities.
"We are underweight utilities as we fear issuance, which can hit strong performance."
He says he is not tempted by the new retail bond market.
"We have nothing in retail bonds, for three reasons."
"One: the sheer size of them. They are smaller and are aimed at direct retail investors."
"Two: the lack of transparency of companies that come to the market with bond issuances. They do not give much financial information and we want to give credit ratings to all our holdings."
"The third reason is liquidity. I am aware that when retail bonds come, there’s an assurance that there will be a secondary market in them, but we will wait and see about that."
"There’s not much liquidity in mainstream investment grade corporate bonds, so what liquidity there will be in retail issues remains to be seen."
"If you are retail investor and prepared to hold the bond to redemption then it makes sense, but mine is a tradable fund."
Anderson’s scepticism echoes concerns raised by Chris Evans, manager of the IM Matterley Regular High income fund, who told FE Trustnet in January that he feared the retail bond market was exhibiting bubble-like characteristics.