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Husselbee shifts into total return bonds
North chief executive John Husselbee has moved a third of his fixed income portfolio away from strategic bonds into total return bond funds.
Mr Husselbee last week added a position in JPMorgan Total Return Bond and sold out of M&G Investments' Optimal Income and L&G Investment Management's Dynamic Bond fund as he prepared for the next run in equities.
Reaching the IMA's Cautious Managed threshold of 30 per cent in bonds and cash, Mr Husselbee currently has 5 per cent in total return bond funds, 15 per cent in strategic bond funds, 6 per cent in currency and the remainder split across cash, near cash and a bespoke structured product designed to benefit from rising 10-year gilt yields.
Now the 30-year bond rally was over, Mr Husselbee said rising yields had prompted a review of his fixed income holdings.
He said: "It is not just about defence and income any more. The credit market was showing equity-like returns, and now the next stage will be that equities pick up, but I would rather be earlier than later."
Elsewhere, Mr Husselbee has also sold out of his ETF Securities gold bullion ETF, reinvesting into a 4 per cent position in BlackRock Gold & General.
He said: "We recognise a real disconnect between the price of gold and the price of gold shares."
