Investors flock to strategic bond sector at start of the year

Portfolio-Bonds-Investment-Business-700x450.jpgThe strategic bond sector saw the biggest flows in January as investors adopted a cautious stance going into the year, according to the latest data from FundsNetwork.

The global bond and high yield bond sectors also featured in the top 10 best-selling sectors in January. However, only one fixed income fund made the list of bestselling funds for the month; the Baillie Gifford Corporate Bond fund.

Perennial favourite Fundsmith Equity was the overall best-selling fund, while Invesco Global Targeted Income ranked highly across the bestsellers lists in January.

Danny Wynn, head of fund partners for Fidelity International, says: “With the inauguration of Trump that took place in January having the potential to unsettle markets throughout the month, we perhaps unsurprisingly saw many investors seek to either diversify their portfolio through geographical or asset class diversification or seek the safety of fixed income.

“This was evidenced by the popularity of the Fundsmith Equity fund and the Invesco Global Targeted Income fund as well as the demand we saw for the various fixed income sectors.

“So far markets have taken a Trump presidency in their strides. However, as President Trump’s incumbency goes on and with the triggering of Article 50 clearly on the horizon, we could see sentiment becoming increasingly unsettled resulting in increased demand for defensive assets that offer a port in the storm.”