Profiles and Analysis
PASSION 22-23
Poor performance mars bond growth “It may not be a great time
There is a distinct hierarchy as far as investors are
concerned, and last year’s returns putting cash ahead
of bonds upset the traditional apple cart.
Unsurprisingly, most bond managers today are
revelling in the current climate of plummeting equity
markets and we are now starting to see not only the
argument for bonds gaining credence, but the argument
turning to what type of bond investors should prioritise.
However, corporate bonds managed to have one of
their worst performances on record in September –
up (or rather down) there with property and hedge
funds – setting this argument back somewhat.
Cash is still a strong presence in retail investors’
portfolios although, despite persistent market volatility,
commodities still provide a good diversifier. Instead of
the argument being which commodities to invest in, the
argument is turning to how they can be accessed.
� With commodities continuing to play a role in portfolios,
oil prices are still falling, with Brent Crude dropping
below $55 a barrel.
� Commodity and natural resources funds fell 21.5% in
October and by 35.7% in the past three months.
� They have rallied in the past few weeks while corporate
bond funds continue to fall, dropping 3.4% in the first
ten days of November.
� UK property funds were down 6.3% in October and are
already down 5.5% in the first ten days of November.
DECEMBER 2008 [www.portfolio-adviser.com] PORTFOLIO ADVISER
In this section…
Manager profile
JOHN PATTULLO 20-21
“If the business is not working
for the shareholders there will
be a change of management,
strategy and balance sheet; if it
does not work for bond holders,
tough” Attitudes to bonds are
changing, says Henderson’s
John Pattullo, a frustrated equity
manager who is revelling in the
fact that now is the right the time
for bond investors
Investment strategies
COMMODITIES 24-25
“An allocation to a range of
commodities in a diversified
equity and bond fund can
improve the risk and return
characteristics of the overall
portfolio” Despite short-term
volatility, commodities have a
strong long-term role to play.
The issue is whether to access
the theme through a unit trust,
structured product or exchangetraded
fund, says Rob Griffin
Viewpoint
INVESTMENTS OF
to buy into what some call
the ‘investments of passion’
category… unless your passion
is such that you don’t mind if
you lose money on the deal,
at least in the short term”
Helen Burggraf looks at how to
treat wine, art and similar niche
investments at a time when one
prime main attribute – a lack of
equity and market correlation –
is waning
19
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