Gilts
The active pick Allianz Gilt Yield Given the lack of levers available to managers of gilt funds , Sánchez says a passive approach can work effectively in this area . However , he is a fan of
Allianz Gilt Yield , run by Mike Riddell . “ We like the considered approach employed by Riddell , who has extensive knowledge of bond markets and macroeconomic factors , which he expresses across the UK yield curve in a risk-controlled manner ,” he says . Riddell can invest up to 20 % of the portfolio in off-benchmark positions , primarily foreign government bonds , where the analysts at FE Investments say he has added value .
The safety-first option Royal London UK Government Bond IBOSS recently added
Royal London UK Government Bond to its model portfolios . The fund , managed by Ben Nicholl and Craig Inches , is first quartile in the IA UK Gilts sector over one , three and five years , and Rush says Royal London has “ pedigree ” in fixed income : “ Inches has been in the industry since before 2000 and has experienced a variety of interest rate conditions .” The fund is on FE Investments ’ Approved List , even though its analysts say there is limited scope for outperformance : “ The team could have incorporated its active views into the portfolio to a greater extent .”
The index-linker Vanguard UK Inflation-Linked Gilt Index For investors who want to go down the passive route in the IA UK Index Linked Gilts sector , its biggest fund ,
Vanguard UK Inflation- Linked Gilt Index , is a good place to start . The £ 1.9bn strategy aims to track the performance of the Bloomberg UK Government Inflation- Linked Float Adjusted Bond index through buying bonds with maturities of longer than one year . FE Investments says Vanguard ’ s assets under management give it large economies of scale , allowing it to keep charges low . “ The risk team ensures the team ’ s process is minimising costs on an ongoing basis ,” it explains .
Issue 89 - November 2022 / 61 /