High-yield allocation dictates fortunes of Other Bonds

Artemis High Income tops sector using 20% equity allowance to the full, while high-yield portfolios tend to dominate peer group over three years

Three good years for high-yield debt has led to funds investing in the area dominating performance in the UK Other Bonds sector. However, the sector definition allows for radically different funds within the same peer group. Funds must invest at least 80% of assets in bonds that are either sterling denominated or hedged back to sterling, and at least 20% in sub-investment grade debt. Over three years to the end of February, the peer group saw average growth of 27.18% bid to bid, according to Morningstar. Top of the heap is the £733m Artemis High Income fund managed by Adrian Frost and Ad...