It has been three months since we presented our initial selections for the new Money Observer ethical portfolio, and the time has flown by. “May you live in interesting times,” goes the apocryphal Chinese curse; in this first update, we review market developments over a very ‘interesting’ period, explore what these have meant for returns from the portfolio, and assess how its performance compares with that of markets in general.
We are delighted to have been invited to create a model fund-based ‘ethical’ portfolio for readers to follow. But before we introduce you to our fund selection, let’s quickly establish our approach to the task in hand.
Bond markets have sent another recession warning signal, with a more noteworthy part of the bond yield curve inverting for the first time since the global financial crisis.
Earlier this year, in mid-March part of the yield curve inverted, the bit between the 10-year and three-month Treasury bonds (debt issued by the US government).
Investment flexibility is a huge boon, but only when it is used wisely. ‘Go anywhere’ strategic bond fund managers excelled prior to 2018, riding the tail of the 35-year bond bull market, but the return of volatility last year – one of few tests since the 2008 financial crisis – proved challenging for some.
For the first time since the global financial crisis, bond markets are signalling the end of the current market cycle is in its final stages.
Our first group of rated bond funds comprises those focusing on UK sterling denominated bonds where managers can spread their holdings.
Retail investors can now invest in the popular Muzinich ShortDurationHighYield fund through a new share class, due to demand from wealth managers.
Inflation and base rate doubts put strategic bond funds in focus, writes Faith Glasgow.