Are litigation funds worth the risks?

LITIGATION FUNDS

As investors turn to more esoteric income strategies, David Coombs, head of multi-asset investments at Rathbone Unit Trust Management, explores whether litigation funds fit the bill.

The legacy of the Great Recession has been one characterised by near zero short rates, as Western central banks have pushed conventional monetary policy to the limit in a bid to support flagging growth. Unconventional policy measures, such as quantitative easing, have also served to push long-term interest rates – such as the yield on the UK 10-year gilt and US treasury – to historic lows. In this environment, income investors have turned to equity and corporate bond markets as an alternative. With the low growth environment likely to persist, and Western central bankers unlikely t...