Bond Funds

The current issue of Investors Chronicle magazine (7 October 2011 to 13 October 2011) has a article called “Backing the right bond fund” in the Funds section. Following this article is an analysis of the following four bond funds:

  • Fidelity Strategic Bond Fund (GB00B05NC964)
  • M&G Optimal Income A Inc (GB00B1H05049)
  • Standard Life AAA Income R Inc (GB0006573108)
  • Kames High Yield A Inc (SEOPAI)
I have been looking to put some more investments into my Fidelity ISA for 2011/12 and after reading the article I decided to put a small amount into each of the M&G, Standard Life and Kames funds listed above which are yielding 4.49%, 3.14% and 7.23% respectively (according to the Investors Chronicle figures).
Earlier today I also put another £400 into Fidelity MoneyBuilder Income Fund (Gross). I like this fund as it is yielding over 4% which comes in monthly dividend payments which I have chosen to reinvest back into fund units.
According to the Fidelity notes on the fund, the top 5 long positions as of 31/7/2011 were (net allocation percentage is shown in brackets):
Long Guilt Fut Sep11 (8.9%)
Vodafone Grp 5.375% (1.51%)
Eur Inv Bk 6% (1.50%)
United Kingdom (Government Of) 4.5% (1.4%)
Aspire Defence Fin 4.674% (1.37%)
I will now have invested around £1000 into the Fidelity Moneybuilder Income Fund (Gross) for the 2011/12 ISA season which should generate income of about £3.40 to £3.60 per month, or around £40  to £45 per year, which will be reinvested monthly to more units and so compounding the return.

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