A low interest rate environment and escalating volatility in the equity markets has increased investor appetite for bonds.
One of the most popular sub sectors are strategic bonds funds – an area of the industry which has had some of the biggest recent inflows.
The largest fund in the space is M&G Optimal Income Fund, according to the Absolute UCITS database. It is run by Richard Woolnough and has more than $10 billion assets under management.
Strategic bonds, depending on the fund, have an unconstrained approach to investing in the global fixed income market.
One of the newer portfolios is the Newscape Strategic Bond Fund and its lead manager Charlie Kerr (pictured) says that the reason for this is because investors are focusing these days more on capital preservation rather than return on capital.
He says: “Over the past few years, strategic bond funds have seen the biggest inflows amongst the...