3rd March 2014
Tom Stevenson, investment director at Fidelity Personal Investing, highlights three funds for cautious investors looking at a last minute ISA…
For many savers, safety is key. As we emerge from the market turmoil of the past few years, and the UK continues its fragile recovery, it’s easy to see why many of us are prioritising stability over the potential for higher growth from riskier investments. For risk-averse investors, bonds are traditionally a safe solution, providing income with relatively low volatility.
M&G Optimal Income
Richard Woolnough has been running this fund since its launch in 2006. He’s also responsible for managing M&G’s Corporate Bond Fund and its Strategic Corporate Bond funds – but the Optimal Income fund is his most unconstrained strategy across these three. It has a particular focus on income, which means it holds a higher proportion of high-yield bonds than similar funds in its sector. It has a low exposure to bonds issued by banks and other financial institutions, which may appeal to cautious savers who wish to stay away from these investments.
L&G Dynamic Bond Trust
This fund is a truly flexible total return fund, run by highly-experienced portfolio manager Richard Hodges since 2007. The fund combines a ‘top-down’ view with ‘bottom-up’ analysis in investment-grade and high-yield bonds from around the world. Allocation to different assets is actively managed, and Hodges makes use of financial instruments to adjust currency exposures and to enhance returns. With access to a broad range of L&G’s fixed income research, the fund can draw on a wealth of expertise to source its investment ideasT