Fixed Income  

Kames chief looks to broaden range as bond bear market looms

Kames Capital’s new chief executive Martin Davis is looking to broaden out the appeal of the fund house beyond fixed income as investors prepare for a possible bear market in bonds.

The group is known as a fixed income specialist but Mr Davis said he was keen to expand the firm’s multi-asset, property and global equity capabilities as he looks to grow the Kames brand both in the UK and globally.

Although some commentators do not expect fixed income markets to produce the strong returns they have produced in the past 20 years, Mr Davis said he expects to grow Kames’s share of the fixed income market next year.

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He said: “We think we can have a strong 2014 especially compared to others that are looking at negative net flows.”

In 2013, Kames’s bond funds grew in part by taking money from rivals, especially larger bond funds, according to Mr Davis, and he believes the same can happen in 2014.

However, with the fixed income market set to struggle, the new chief executive, who joined in September from the platform Cofunds, said he was looking to improve the firm’s offerings in other asset classes.

Kames is preparing to bring its institutional property expertise to retail investors and the group is set to launch its first retail property fund at the end of the first quarter in 2014.

Mr Davis said he was also looking to promote the firm’s equity capability, which he said had improved in recent years, though he said Kames was “not as good as we would like to be” in international equities.

With the exception of the Kames Ethical Equity fund, none of the Kames equity funds are outperforming their sector averages in the past three years, according to figures from FE Analytics.

The group has three multi-asset funds in the UK retail space, the top-performing Ethical Cautious Managed fund, managed by Audrey Ryan and Iain Buckle, Scott Jamieson’s Inflation Linked fund and the Strategic Assets fund, which is languishing near the bottom of the IMA Mixed Investment 20-60% Shares sector in the past year.