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BlackRock Corporate Bond
Analysts continue to back this fund after recent poor performance , but say there is now less evidence its manager is adding value
It is some time since UK corporate bonds have looked like a decent bet for income investors , with average yields hovering about 2.5 % for much of the past decade . This all changed last year as the Bank of England rushed to hike interest rates to keep inflation under control . Average yields on the S & P UK Investment Grade Corporate Bond index jumped from 2 % at the start of 2022 to about 5.5 % today . The inverse relationship between yields and prices led the IA Sterling Corporate Bond sector to fall 16.1 %. But this may represent a buying opportunity for investors looking for total returns as well as income . Darius McDermott , managing director at Chelsea Financial Services , highlighted the BlackRock Corporate Bond fund in this area , referring to manager Ben Edwards as an “ experienced decision-maker ”. Edwards looks for opportunities towards the lower end of the investment grade spectrum , where there is greater dispersion of pricing and quality . He offsets the higher risks associated with this area by taking shorter duration – or lower sensitivity to interest rates – than his peers . However , he decided to add risk to the portfolio in late 2021 , which proved to be mis-timed and hampered performance . Analysts at FE Investments continue to back the fund , saying its ability to keep up with its peers when its shorter-duration positioning acted as a headwind shows an ability to find hidden value . “ Over the long term , the team has done a good job of identifying bonds of high-quality companies that are
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