I will not disagree that it is a calculated risk, but the argument is starting to look very compelling.
Funds to choose from
Artemis Target Return Bond: This fund is a ‘steady Eddie’ targeted absolute return fund, with a heavy emphasis on controlling risk. It targets an annual return of at least the BoE base rate plus 2.5 per cent after fees.
Snowden is one of the one most experienced fixed income managers in the UK, and he has a great long-term track record. The fund has a solid, flexible process, combined with a tight risk management.
SVS Church House Tenax Absolute Return Strategies: A defensive offering that has a blend of asset classes and is currently well protected from an inflationary environment with a considerable weight to floating rate notes.
The duration on the bond allocation of the portfolio currently stands at four years.
TwentyFour Absolute Return Credit: Invests predominantly in investment-grade bonds that are due to mature shortly. It has been designed to be easy to understand and does not 'short' stocks or borrow any money to boost returns.
The fund currently has a modified duration of one and a half years.
Darius McDermott is managing director of Chelsea Financial Services and FundCalibre
