Stock selection will dominate returns

Fund manager's comment

Despite many commentators thinking that UK yields were expensive at the start of 2004, the year actu...

Despite many commentators thinking that UK yields were expensive at the start of 2004, the year actually witnessed modest capital gains for most sterling bonds. So given good to excellent returns last year, what will sterling bond returns look like for 2005? Quite different. In the investment grade market, 2004 was characterised by a high degree of correlation between sectors. This translated into a tightly-knit pack of fund returns within the sterling diversified bond sector. But in actual fact, there was not much more than 1% in total return terms separating the top quartile from the bot...