Bonds: Corporate Bonds

Published by Philip Scott on 30 July 2015.
Last updated on 30 July 2015

According to trade body, the Investment Association, collectively we now have £899 billion invested in funds - pooled investment schemes sometimes referred to as unit trusts or OEICs.

But investing can be a tricky business, given the plethora of products on offer. In addition, investing is also a long-term business and there will be ups and downs, so patience is key. While there is no shortage of funds to choose from, finding fund managers who can deliver consistently is another matter.

Rob Gleeson, head of FE Research, a fund analyst, explains: "Generally, the most consistent managers are the ones with a strong core strategy. While they will have ups and downs across the business cycle, over multiple cycles they offer relatively stable returns."

To give you an idea of where you might want to squirrel away some cash, we've picked out 50 fund choices, as recommended by some of the UK's top fund-pickers. Our panel includes: Darius McDermott, managing director of brokers Chelsea Financial Services; Mark Dampier, head of research at Hargreaves Lansdown; Gavin Haynes, managing director of Whitechurch Securities; and Adrian Lowcock, head of investing at Axa Wealth.


Bonds, sometimes referred to as fixed-income investments, are 'IOUs' issued by governments or firms looking to raise cash. Investors lend their cash for a set period of time and, in return, the issuer pays interest. When the bond matures, the capital should be returned in full. Experts recommend them to create a balanced and diversified portfolio.


These funds invest in bonds issued by companies.Again,the asset class is concerning many investors, with interest rates due to rise at some point.The credit quality on the bonds being invested in depends on the issuer so risk can differ, sometimes significantly between funds.

33. M&G CORPORATE BOND - Five-year return: 34%

Run by Richard Woolnough, McDermott asserts the portfolio is significantly less risky than the UK stockmarket, which is consistent with the nature of the underlying investments.

34. KAMES STERLING CORPORATE BOND - Five-year return: 37%

Tipped by Haynes, he says: "This fund is managed by the highly regarded David Roberts with a strong fixed-interest team behind him.The fund will invest mainly in UK fixed-interest bonds with predominantly higher quality investment-grade credit."

35. INVESCO PERPETUAL CORPORATE BOND - Five-year return: 33%

Backed by McDermott and Lowcock, this portfolio is also run by Paul Read and Paul Causer. Lowcock notes the duo's track record stands up versus their peers. Experts also note that historically it has had a much lower risk profile than the UK stockmarket.