Faith in floating rate notes delivers for M&G manager Lord

M&G's £233.3m High Interest fund has powered ahead of Money Market sector peers over the past year after retaining exposure to floating rate notes hit hard during the financial crisis.

While most funds in the IMA sector are comprised of cash deposits – where returns remain considerably depressed – High Interest manager Ben Lord’s decision to keep faith in floating rate notes delivered a 11.9% rise over year to 29 March, almost 11% ahead of the average. As more than 90% of floating rate notes are issued by financials, Lord says the instruments came under tremendous pressure at the onset of the turmoil in 2008. “The day Northern Rock got into trouble, the genuine concern for us on the M&G retail fixed income team was if the Government did now step in, how many other b...