Fidelity's Spreadbury: How I would cope if the bond rush reverses

Fidelity's Ian Spreadbury has revealed how he would cope with a sudden round of redemptions if demand for corporate bond funds reverses.

While some of the UK’s largest corporate bond funds – including Spreadbury’s £3bn MoneyBuilder Income fund - are seeing very strong demand from investors looking for a greater income than cash pays, the regulator has grown wary about liquidity as new issuance dries up. As revealed by Investment Week earlier this month, the FSA has written to bond fund managers and asked them to perform stress tests to assess their liquidity if investors moved out of the sector en masse. Last week it was announced two of the Corporate Bond sector’s largest funds – M&G’s £6.2bn Corporate Bond and £5.1bn...