M&G’s Woolnough warns pound could plummet

"I am positive on the economy, but have become more cautious in terms of the bonds I own."

The M&G Optimal Income fund has returned 120 per cent over the past decade, compared with 80 per cent for the average fund in the IA UK Sterling Corporate bond sector in the same time period.

Matthew Toms, investment manager at Heartwood Investment Management, said he believes buying funds that offer exposure to the UK domestic economy is the better value option right now, rather than investing in funds that focus on the overseas earning potential of UK companies.

John Hudson, manager of the Premier UK Growth fund, said small and mid cap shares represent better value right now because of the volatile nature of some companies in the FTSE 100, such as miners and oil companies.