Jupiter Strategic Bond off to a good start

The fund aims for a high income with the prospect of capital growth by investing in higher-yielding assets such as high-yield, investment grade, government and convertible bonds, as well as preference shares. The fund invests globally, although at present a third of its assets are allocated to the UK, with more than a quarter in Europe.

Fund manager Ariel Bezalel looks for bonds that offer value and good risk/reward positions. He considers both the wider macroeconomic environment and bonds' individual merits. He spends a lot of time researching and meeting the management of the companies that issue the bonds, helped by Rhys Petheram, co-manager of the Jupiter Distribution Fund, who used to work at credit ratings agency Moody's.

Mr Bezalel then takes a macroeconomic view of factors such as inflation, interest rate outlooks and the shape of the yield curve in relation to the corporate bond market, which influences his positioning of the portfolio.

He favours preference issues from companies with robust business models and competent management teams and invests for the medium to long term. In the current economic environment, he tries to invest in bonds at the highest possible end of a company's capital structure, so that in the event of a default the fund would be one of the first in line to be paid back.

Source: Morningstar & *Jupiter

Performance data as at 27 April 2012

Top 10 holdings as at 31 March 2012

Credit rating breakdown