Fixed Income  

City Financial to merge away Strategic Gilt fund

City Financial is to merge its underperfoming Strategic Gilt fund into Graham Glass’s Defensive Global Bond fund.

The Strategic Gilt fund has been run by Ian Williams of Charteris Treasury Portfolio Managers since its launch in December 2006.

Andrew Williams, chief executive of City Financial, said the decision to merge the fund away was based on its small size and the difficulty this posed when competing with larger gilt fund managers such as Pimco and M&G Investments.

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“Currently the size of the fund isn’t really efficient for investors,” Mr Williams said, adding that Mr Glass’s fund would give investors a “very good” defensive alternative.

Ian Williams’ ultra-bearish stance against his own asset class saw the Strategic Gilt fund fall to the bottom of the IMA UK Gilts sector in both three- and five-year periods according to FE Analytics, as government bonds rose to record levels. But in the 12 months to November 11, the fund was the best performing product in the sector as gilts fell on the back of talk of possible tapering of quantitative easing.

City Financial has been streamlining its fund range in recent months following a period of acquisitions.

It hired Eden Financial managers Leigh Himsworth and Mark Harris in October 2012, bringing Mr Himsworth’s UK Opportunities fund across in the process. This was followed by the acquisition of OPM Fund Management in April this year.

Andrew Williams said: “We have grown quickly by acquisition so it is not surprising that some structures are now not necessary. We had a number of similar or identical mandates, and bigger funds can bring total expense ratios down.”