Bond funds have long been popular with more cautious investors, although that does not mean they are immune from risk: as expectations of interest rate rises increase, capital values of bonds are likely to move downwards but income yields rise.

In this environment we therefore favour “strategic bond funds” that have lots of flexibility to invest across the full spectrum of the bond markets in search of decent returns and mitigating risks. One such fund is TwentyFour Dynamic Bond.

TwentyFour is a relatively new London based, fixed income boutique. The senior partners have an average of 20 years’ experience in fixed income markets and have previously traded fixed income securities at leading investment banks.

The small size of the TwentyFour Dynamic Bond fund enables the team to exploit investment opportunities and adopt a more active approach to portfolio management against an illiquid market backdrop. The fund encompasses the team’s best ideas and invests across the full gamut of fixed income including positions in Asset Back Securities. The fund uses derivatives to manage risk.

Performance since launch:

Source: Lipper

Jason Hollands is managing director of Bestinvest. 

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