You don't have credit card details available. You will be redirected to update payment method page. Click OK to continue.
Following on from a recent question on fixed interest, what are some tips on selecting a decent corporate bond fund manager?
I am looking at AMP Capital corporate bond fund, but keen to understand the ways to evaluate this against others. Any advice appreciated, along with some “top bond manager” tips.
A: Thanks for the question.
The starting point is to understand the investment mandate of the fund, and if trying to compare funds, how these differ. For example, a corporate bond fund that invests only in securities rated “investment grade” will behave quite different to a corporate bond fund that invests in securities of all ratings. The former should be a lower risk fund, but probably also deliver lower returns. Apart from credit risk, the other major differentiator is duration risk – the average time to maturity of the fund’s assets.
Assuming that that the funds are of the same type (credit and duration risk), then I consider these areas to differentiate:
a) performance (whether, and with what consistency, the manager has beaten the benchmark);
b) relative value for money – ie management fee; and
c) brand strength/reputation of manager
Hope this helps.
