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Spotlight on... our sterling bond portfolio

Over the last quarter, returning risk appetite and normalization in the credit markets, has seen a growing focus on corporate bonds as the investment of choice. The significant flow of funds into this asset class have been driven by the attractive yields on offer, compared to historically low cash rates, and the prospect of continued volatility in equity markets.

The predictable stream of payments bonds deliver, as a consequence of their regular coupon distributions, help facilitate financial planning - be it for school or university fees, retirement income or simply meeting day-to-day living expenses.

Fairbairn Private Bank offers investors access to the fixed income market through our recently launched sterling bond portfolio. Available as part of our discretionary investment management service, for a minimum investment of £250,000 or more, this income generating strategy aims to deliver returns in excess of cash, whilst preserving capital invested. The principal holdings are in sovereign (ie, government) and / or investment grade corporate debt and, when appropriate, the mandate may also make satellite investments into emerging market and high yield bonds.

The strategy has been running for eight months (launch date 30/11/08) and the return for the seven-month period to the end of June was 9.30% net of fees.

The benefits of our sterling bond portfolio:

  • Income generating potential
  • Potential for capital growth
  • Low volatility (targeted 3 to 7% standard deviation)
  • Easy access (minimum withdrawal of £10,000 or currency equivalent. It can take up to 7 days for funds to become available).

The risks:

  • Investors must be aware that corporate bonds typically have more risk, ie, credit and default risk, than government debt of developed countries
  • The price of, value of, or income from your investments can fall as well as rise and you may not get back the original amount invested
  • Past performance is not necessarily a guide to future performance.

Datasheet available to view online. Other versions are available on request.

To find out more about this service and explore other options available, please contact your relationship manager directly or our client services team on +44 (0) 1624 645000.