Fixed Income  

Aberdeen multi-managers sell M&G to boost favourites

Aberdeen Asset Management’s multi-manager team has said it is divesting its position in M&G’s UK Inflation Linked Corporate Bond fund in favour of existing fixed income managers.

Graham Duce (pictured), co-head of multi-manager at the group, said he had started selling down and would fully divest his £306.8m Cautious and £55.8m Multi-Asset Distribution funds’ holdings in Jim Leaviss and Ben Lord’s £474.9m M&G UK Inflation Linked Corporate Bond fund.

The M&G fund has delivered a bottom-quartile 6.6 per cent return compared with the IMA Strategic Bond sector average of 13.4 per cent in one year, according to FE Analytics.

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It has delivered bottom-quartile returns since launch in September 2010 of 10.3 per cent compared with the sector’s 16.7 per cent, the data provider added.

Aberdeen’s Mr Duce said he had used the proceeds of the sale to boost his weightings in Bob Jolly and Gareth Isaac’s £65.4m Schroder Strategic Bond fund and the BlueBay Investment Grade fund run by Raphael Robelin.

“We feel the M&G fund will, in more risk-averse markets, because of the duration on the portfolio which tends to be on the shorter side, offer little in the way of protection,” he said.

“With regard to inflation we can’t see any meaningful inflation pressures emerging.

“I’m sure the fund is something we will go back to but at the moment we prefer higher conviction positions who can go to the linker market if they want to.”

Mr Duce said while the Schroders fund was relatively new, having launched in March last year, the team had supported the offering from the outset and had also invested in Mr Isaac in previous roles at GLG Partners and Société Générale Asset Management.

“Gareth describes himself as an optimist but I would say he has one of the more conservative funds,” he said.

The Schroders fund has delivered a third-quartile return since launch of 9.3 per cent, which is just short of the 9.4 per cent delivered by the IMA Strategic Bond sector, according to FE Analytics.

The multi-manager added that the team had been invested in the BlueBay fund for five years and was also “more conservative” than the M&G fund.

“It tends to fair better in more challenging markets,” he said.