Compared with traditional fixed interest funds, strategic bond funds use wider investment mandates in order to adopt flexible strategies that should enable them to deliver positive returns, regardless of broader market conditions.

Managers will buy a wider range of bonds, including below-investment grade high-yield corporate bonds, and even derivatives to achieve investment objectives, which of course vary between funds.

There are many types of fund in the sector so it is important to understand the differences in mandates.

This guide will explain the importance of getting to grips with the objectives of these funds, what part they should play in an investor’s portfolio and the type of performance investors can expect in different market conditions.

Contributors to this guide included: Stuart Rumble, investment director for fixed income at Fidelity Worldwide Investment; Gill Hutchison, head of investment research at City Financial; Azim Meghji, head of UK fixed income at Santander Asset Management and fund manager of the Santander Strategic Bond fund; Karthica Underwood, Chartered Financial Planner of Principal Financial Planning; Carl Lamb, managing director at Almary Green; and Mark Wright, fund manager of the CF Seneca Diversified Growth fund.