Luis increasing floating rate holdings on Strategic Bond

F&C's Fatima Luis is boosting exposure to floating rate notes as a protection against rising rates.

The manager of the £238m Strategic Bond fund plans to increase floating rate holdings to 12% of the vehicle. Recent acquisitions include a Man Group bond currently yielding 350bp on a price of 88p. “Fixed rate bonds are attractive in a low-rate environment, but what if yields start to rise and bond markets push policymakers to increase rates earlier?” she says. “At the moment the market is not pricing in higher interest rates so we are able to buy floating rates at a considerable discount to par.” Luis, who has been increasing high yield exposure since the end of last year, is also...