Distribution funds return to favour

groups alter mandates to take advantage of abolition of isa tax credit on all funds except those with at least 60% exposure to fixed interest

Distribution funds, a backwater during the bull market of the late 1990s, have returned to the fore as fund managers revert back to basics in order to sell funds. The appeal of being able to smooth returns through a mixture of equity and bond exposure has become a powerful driver behind investors' investment decisions, particularly after the ravages of a three year bear market. Reducing volatility through investing in the two largely non-correlated asset classes is by no means a new innovation. But its benefits have been magnified in recent times due to the criticism with-profits vehic...