DWS signals vote of no confidence in UK bonds

corporate bonds

charles mckenzie has 90% of fund marketed against uk benchmark in us paper

The DWS Corporate Bond fund is more than 90% invested in US corporate bonds even though it is listed in the UK Corporate Bond sector. The allocation is based on the manager's belief there is currently little value in the UK market. The US exposure is all hedged back into sterling through forward currency contracts, while the interest rate risk is hedged through the swaps market to mirror the UK interest rate profile. Charles McKenzie, manager of the fund, said: "A lot of large companies issue in several currencies and we are finding far more value in US credit at the moment. For example...