Strategic Bonds benefit from appetite for risk

The fortunes of the top performers in the £ Strategic Bond sector are linked to risk appetite in the aftermath of the credit crunch.

But this space and the funds in it face similar challenges to that of any other bond sector – to get the right balance of duration and credit risk within the underlying investments to suit the economic back-drop. M&G Richard Woolnough, manager of the M&G Optimal Income fund, said the Strategic Bond sector offers its own positives: “The good thing about the strategic sector is the flexibility it affords managers to put their views into their portfolios.” “For example, in the Optimal Income fund, I can invest right across the credit spectrum from government bonds to high yield depen...