Dual process and bank plays bring top returns for Smitten

Cazenove vehicle beats Corporate Bond sector average by 5.3% over three years

Cazenove’s Alex Smitten’s sector bet on banking at the start of last year has served his UK Corporate Bond fund well as spreads have narrowed significantly since 2009. The manager of the £296m fund uses a dual process comprising core sector and stock selection with an interest rate duration overlay. In the first part of this strategy, the manager allocates the portfolio’s risk between the sectors and then selects individual issuers. Smitten explains the decision to move into banks, currently 36% of the fund, was a product of the initial part of this process. Having assessed the ...