Henderson Strategic Bond Fund is run by respected fixed income manager John Patullo, alongside co-manager Jenna Barnard.
The fund is the second best performer over the last five years in the Investment Management Association's (IMA) Sterling Strategic Bond sector with a 28 per cent total return, against the sector average of just over 15 per cent. It is also one of the higher yielding funds over this period.
The fund invests in higher yielding assets, including high yield bonds, investment grade bonds, government bonds and preference shares. It can also invest in equities, though does not have any substantial holdings in these.
The fund also uses credit derivatives such as interest rate futures both for asset allocation and extra hedging.
Over the past year, the fund has reduced its exposure to government bonds as Mr Patullo is now more concerned about rising government bond yields than corporate defaults. The fund has gone short of government bonds by using interest rate futures.
Mr Patullo, who also runs the Henderson Preference & Bond Fund, and Jersey domiciled investment company Henderson Diversified Income, currently favours areas including secured loans, high yield bonds and subordinated banking bonds, with the fund gradually taking profit from best quality investment grade bonds and redeploying the capital to secured loans and higher yielding securities, which reduces interest rate sensitivity and increases credit exposure.
Financial bonds added to the portfolio over the last couple of months include issues from the Co-operative Bank, Bupa Finance and Legal & General.
HENDERSON STRATEGIC BOND FUND (INC) | |||
---|---|---|---|
PRICE (NAV) | 123.6p | 3 YR SHARPE RATIO | 0% |
SIZE OF FUND | £608.56m | 1 YR PERFORMANCE | 28.99% |
No OF HOLDINGS | 237* | 3 YR PERFORMANCE | 11.23% |
SET UP DATE | 25-Nov-03* | 5 YR PERFORMANCE | 28.25% |
MANAGER START DATE | 25-Nov-03 | TOTAL EXPENSE RATIO | 1.31% |
3 YR BETA | 0.52 | 12 MTH YIELD | 6.81% |
INITIAL CHARGE | 4.00% | MINIMUM INVESTMENT | £1000 |
ANNUAL CHARGE | 1.25% | MORE DETAILS | www.hendersonnewstar.com |
Source: Morningstar and *Henderson as at 7 December
Top 10 Holdings as at 30 October 2009
Holding | Percentage |
---|---|
ITV 5.375% 2015 | 1.72% |
Legal & General Perp 6.385% | 1.71% |
Societe Generale 8.875% 2012 | 1.70% |
UPC Holdings 9.75% 2018 | 1.69% |
Credit Suisse 6.875% 2049 | 1.67% |
Santander Finance 11.3% 2049 | 1.64% |
Barclays Bank 10.179% 2021 | 1.48% |
Carlsberg 7.25% 2016 | 1.37% |
Standard Life Finance 6.75% 2049 | 1.36% |
Anheuser-Busch 6.5% 2017 | 1.28% |
Asset Allocation
Credit rating breakdown | Percentage |
---|---|
AAA | 1.49% |
AA | 0.75% |
A | 22.23% |
BBB | 34.80% |
BB | 12.10% |
B | 11.70% |
CCC | 0.61% |
Other | 11.79% |
Cash | 4.51% |