Moneyspider in the News
17/06/2007
The experts word could be your bond
The Sunday Telegraph
Millions of investors bought into the corporate bond story after seeing equities plunge in value at the start of the century. Advisers in banks and building societies have sold corporate bonds funds by the bucket-load ever since the FTSE100 index plunged from its high of 6,930 at the beginning of 2000.
But they didn't stop selling these funds when share prices started to creep back up in early 2003. Many of the funds sold by household names have delivered dire performance. Virgin Income, for instance is a fourth quartile performer over the past one, three and five years.
The £688m Nationwide High Income, another big seller, was in the same bottom 25% of funds in the corporate bond sector over three and five years. The £2.2bn Scottish Widow Corporate Bond fund has underperformed the average over one and three years as has the £351m CIS Corporate Bond fund.
"Clearly, investing in the big brand names can be ruinous, and as we have seen, thousands of investors would have been considerably better off in standard online savings account", says Tony Ahearne of Moneyspider.com, the financial fund website.
Advisers still believe that bonds are a useful component of diversified portfolio, but you want to check out the performance of you fund - if it's underachieving then consider a switch.
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