A fully flexible way to invest
3 minute read
Bond markets have had a turbulent time during the global pandemic in the same manner as shares have. It has reminded investors that investing in a fund with the flexibility to invest anywhere offers the greatest chances of avoiding the problems and backing the winners. These types of bond funds exist but you need to make sure you invest with a manager who has a long track record in investing through some of the most difficult markets.
Who's it for? All investors
Flexible and unconstrained. Two words that sum up this investment fund. The manger has the flexibility to move the fund around, in and out of different parts of the market as and when opportunities arise. And having an unconstrained mindset to investing means the manager has the ability to invest in any part of the global bond market.
While we appreciate that stock markets can be volatile, bond markets can be too. And having the ability to be nimble and agile gives this fund the potential to deliver returns for investors.
The bond market operates a bit like a market in loans. A high quality bond is typically one where there is a good chance that the company is able to pay the interest payments and repay the entire amount when the time comes. A lower quality bond is one where the company is more vulnerable to not paying back the debt.
A fund manager can find attractive investments in both the high quality end of the market and in the lower end. So, an investment fund that has an ‘unconstrained’ approach, is not limited to just one part of the market. This type of approach to investing is sometimes called a ‘go anywhere’ style of fund.
People invest in bond funds for typically one of two reasons. The first is for a level of income. The underlying bonds pay a regular stream of interest, which is then paid out to investors of the fund. The second reason is to diversify an investment portfolio, by investing in a part of the market that typically performs quite different to shares – the bond market.
In order to deliver a stable level of income or a stable total return, investing in a fund that has an unconstrained approach allows that fund to seek out the best investment performance opportunities and avoid problem areas.
If the idea of such an ‘unconstrained’ bond fund appeals to you, then you may wish to consider the Schroder Strategic Credit Fund. There are a lot of strategic bond funds to choose from and they all do different things.
What we really like about this fund is the manager – Peter Harvey is very experienced and has been applying the same investment approach and process, successfully, for many years. In fact, he has over 20 years’ experience, which means he has been investing in bonds through some of the most difficult market environments we’ve ever seen.
In addition, being part of a large organisation means he is able to draw on the wider team at Schroders to help him find compelling investment opportunities.
There are other bond funds on the Barclays Funds List in addition to the Schroder Strategic Credit Fund. Some of these invest in different parts of the bond market and offer the potential for different yields and total returns. Find out more information on these funds.
Correct at the time of publishing.
To diversify your investment, you may like to consider our own Barclays Ready-made Investments (RMI). The RMI are just one example of a range of diversified funds which allow you to select the level of risk you are most comfortable with. These Barclays multi-asset funds invest in passive funds across a range of asset classes and regions, offering a globally diversified solution for investors. Ready-made Investments are not the only funds that we offer and they won’t be appropriate for everyone.
Past performance of the fund and its manager are not a reliable indicator of their future performance.
We don’t offer personal investment advice so if you’re unsure you should seek that independently.
Funds are designed for the long term so you should only consider them if you can stay invested for at least five years.
These are our current opinions but the future, as ever, is uncertain and outcomes may differ.
Read the Assessment of Value report [PDF, 3.2MB] for funds run by Barclays.
The value of investments can fall as well as rise. You may get back less than you invest. Tax rules can change and their effects on you will depend on your individual circumstances.
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