As a result, the fund closed the month at the lower end of the manager's cautious spectrum – in the event, well positioned for the February falls.
After a decade of falling interest rates in the UK, the direction of travel has changed and rates have started to rise.
The managers believe that, if rates now rise faster and further than most investors and commentators expect, gilts and corporate bonds will become more volatile, while their allocation to FRNs will prosper further.
While they have the flexibility to shift some of the portfolio’s allocation to sub-investment grade bonds, they feel valuations currently look particularly stretched in the high yield market.
This fund's highly effective use of diversification has allowed it to deliver excellent risk-adjusted returns over almost a decade and, as a result, it has had one of the highest Sharpe ratios in the absolute return sector since its launch.
If you are looking for an extremely useful portfolio stabiliser, look no further.
Darius McDermott is managing director at FundCalibre