M&G Strategic Corporate Bond
Managed by FE Alpha Manager Richard Woolnough, the M&G Strategic Corporate Bond fund has impressive long-term performance, returning 56.45 per cent over five years. At least 80 per cent of the fund is held in investment grade corporate bonds, with the remainder split across a variety of assets including gilts, overseas bonds and equities.
The fund employs a risk-rated return strategy, meaning that it concentrates on avoiding the losers. M&G’s fixed interest team, which is well known for its research capabilities, carries out in-depth analysis of each issuer, including meeting the management team.
With all the resources this fund has at its disposal, it should continue to perform well. It is currently yielding just over 4 per cent.
Jupiter Strategic Bond
The Jupiter Strategic Bond fund, which was launched in June 2008, has doubled in size in the past year to more than £800m. The fund invests in high yielding assets, which include high yield bonds, investment grade bonds, government bonds, preference shares and convertible bonds. It has a combined objective of generating high income and capital growth.
Performance of fund since launch vs sector
Source: FE Analytics
The fund has returned 53.02 per cent since launch, compared with 23.55 per cent for the IMA Sterling Strategic Bond sector. It is headed up by Ariel Bezalel who has an FE Alpha Manager rating, putting him in the top 10 per cent of fund managers.
According to FE data, the fund is currently yielding 5.5 per cent, which is among the highest in the IMA Sterling Strategic Bond sector.
Fidelity Moneybuilder Income
FE Alpha Manager Ian Spreadbury has been managing Fidelity Moneybuilder Income since its launch in 1995. Performance has been either first- or second-quartile in every year. It is predominantly invested in sterling investment grade corporate bonds.
Performance of fund vs sector over 10-yrs
| Name |
1yr (%) |
3yr (%) |
5yr (%) |
10yr (%) |
| Fidelity - Moneybuilder Income |
7.78 |
39.48 |
28.32 |
66.24 |
| IMA Sterling Corporate Bond |
5.97 |
40.92 |
18.72 |
49.57 |
Source: FE Analytics
The fund is extraordinarily diversified and currently has more than 300 holdings, ensuring a cautious approach to investing. It has proved popular, with assets under management more than trebling in the previous three years to reach £2.8bn as of February 2012.
It is yielding 3.95 per cent, which is competitive in its IMA Corporate Bond sector.
Investec Emerging Markets Local Currency Debt
Launched by FE Alpha Manager Peter Eerdmans and his team in June 2006, the Investec Emerging Markets Local Currency Debt fund has returned in excess of 100 per cent in the last five years. It invests in public sector, sovereign and corporate bonds.
Performance of fund vs sector over 5-yrs
Source: FE Analytics
The fund’s premise is that the potential of the world’s less developed economies far exceeds that of the developed world. It is a riskier proposition than the average fixed income fund, with a significant amount of currency risk. Investec has put a variety of restrictions in place relating to credit rating and portfolio duration, but despite these cautionary measures the fund remains an adventurous choice.
With a one-year historic yield of 6.67 per cent, it is one of the highest yielding funds in its IMA Global Bonds sector.