Are these popular bond funds too exposed to banks?

A number of corporate bond funds are taking on too much risk by running hefty positions to bank bonds, Fund Expert's Brian Dennehy has said.

Dennehy said intermediaries looking to reduce volatility across model portfolios by investing in corporate bond mandates should be wary some funds have a much higher risk profile than others. He said investors are being exposed to hidden risks due to the large exposure of some popular bond funds to banks. He named the £5.4bn Invesco Perpetual Corporate Bond fund, headed up Paul Read and Paul Causer, as the riskiest fund in the sector on these grounds. The fund had 38.57% in bank bonds at the end of May. Causer was bullish on banks earlier this year, telling Investment Week the sect...