Interactive Investor: 2018 ISA fund tips: Nine fixed income and multi-asset trades
Gavin Haynes, investment director at Whitechurch Securities, says: "One of the greatest challenges for us is bond markets and where to find value in a rising interest-rate environment. The recent UK rate rise is the first since 2007, but the concern over rising interest rates has seen the gilt rally run out of steam and they posted negative returns in 2017. We have been avoiding gilts on valuation grounds for some time, with yields providing a negative real return.
"Going into 2018 we continue to believe that the risk/reward trade-off for investing in conventional government bonds is unattractive on valuation grounds, but we don't see bond prices collapsing. A global approach makes sense when investing in bond markets with economies at different stages of the interest cycle.
"We continue to prefer corporate bonds, and particularly funds using special situations such as bonds of financial companies. We look for funds that have a "go anywhere" global approach and have been introducing an element of emerging market debt where risk tolerates it."
He (Gavin Haynes) likes the Jupiter Strategic Bond, as a well-diversified fund with a flexible mandate.
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