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Article: The return is not enough for many bond investors.(UK corporate bond funds perform poorly)(Brief Article)
- Article from:
- Money Marketing
- Article date:
- September 14, 2000
- Author:
CopyrightCOPYRIGHT 2000 Centaur Communications Limited. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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UK corporate bond funds are having a rough time of it this year. CGU's monthly income plus fund, which was once the best performer in its sector, has gone down by almost 10 per cent in the past 12 months, while most of its rivals have not seen much better luck.
Much of the problem has been caused by the poor performance of preference shares, which often make up a sizeable portion of corporate bond funds. In the case of CGU, preference shares make up around 17 per cent of the fund, which fund manager Mark Gull believes accounts for its poor delivery.
He says: "Historically, the fund had a much higher holding in preference shares. We reduced that weighting ...