| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 6.49% | -1.77% | -1.77% |
The Fixed Interest Monthly Income Fund returned -1.77% in Q1 2026, underperforming its peer group average of -0.83%. The fund's duration exposure and overweight position in corporate bonds and loans detracted from performance, while collateralised loan obligations contributed positively. Fixed income markets shifted from optimism around declining inflation to renewed concerns about inflation and geopolitical risk. Advances in agentic AI workflows sparked software industry sell-offs in February, affecting some fund holdings. The conflict in Iran sent oil prices sharply higher in March, altering the inflation outlook. Corporate bond spreads widened significantly, particularly in high yield, as credit stress emerged including private credit BDC developments and UK lender MFS collapse. The fund entered March with its lowest duration in recent years and tactically adjusted positioning around the Iran conflict. Central banks now face assessing the scale of commodity-driven inflation shock and potential need for rate hikes. Significant systemic tail risk remains regarding energy supply shortages and further price increases.
The fund maintains a flexible fixed income strategy focused on providing high monthly income while actively managing duration and credit exposure in response to shifting macro conditions, particularly inflation risks from geopolitical energy shocks.
The outlook has shifted during March given the scale and likely duration of the commodity shock from conflict in the Middle East. Central banks will spend the coming months assessing the scale of the resulting inflation shock and deciding whether interest-rate hikes will be needed. There remains significant systemic tail risk for markets regarding physical shortages of energy products and additional energy price rises.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Apr 15 2026 | 2026 Q1 | EA | credit, duration, energy, fixed income, Geopolitical, inflation | - | Fixed income fund underperformed in Q1 2026 as markets shifted from rate cut optimism to inflation concerns driven by Iran conflict and oil price surge. Duration exposure and corporate bond overweight hurt performance while AI disruption fears hit software holdings. Fund tactically reduced then increased duration around geopolitical events. Central banks now reassessing rate policy amid commodity shock. |
| Oct 16 2025 | 2025 Q3 | - | Bonds, credit, duration, fixed income, interest rates, Spreads | - | Fund outperformed on overweight corporate bonds and bank loans benefiting from spread compression and income. Managers reduced duration while adding credit exposure through derivatives. Despite credit spreads at 20-year tights, they focus on high absolute yields and resilient business models, expecting range-bound spreads supported by strong fundamentals and investor demand. |
| Jul 22 2025 | 2025 Q2 | - | Bonds, Central Banks, credit, duration, fixed income, high yield, investment grade, rates | - | Fund outperformed on credit strength, returning 2.87% versus 2.27% peer average. Credit markets showed resilience with tightening spreads despite volatility. Portfolio tilted toward credit through CLO additions and active duration management. Central banks nearing end of cutting cycles. Managers favor carry over duration risk, maintaining focus on resilient business models while monitoring labour market developments. |
| May 31 2025 | 2025 Q1 | - | Central Banks, credit, duration, fixed income, Trade Policy, Yields | - | The fund outperformed in May driven by credit income as tariff fears subsided and credit markets proved resilient. Management added credit exposure while reducing duration as yields rose globally. Positioned for slow growth environment where carry drives returns, with tactical duration management as central banks near neutral rates and recession risks remain possible. |
| Dec 31 2024 | 2024 Q4 | - | fixed income, interest rates, Performance, Sterling, Strategic Bond, Value Assessment | - | The Fund targets high income from fixed income securities but has underperformed its sector benchmark over five years due to interest rate sensitivity during the challenging 2022-2023 period. Despite recent headwinds, the experienced investment team's robust process and strong historical income generation provide potential for future outperformance as market conditions normalize. |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2026 Q1 |
AIAdvances in agentic artificial intelligence workflows sparked sell-offs across the software industry in February, with investors taking a 'shoot first' approach to AI disintermediation risk. Software holdings detracted from performance as the industry sold off aggressively due to concerns about disruption from AI. |
Software Disruption Technology Automation Workflows |
Credit StressSigns of idiosyncratic credit stress emerged, including developments in private credit business development companies and the collapse of UK lender MFS. Corporate bond spreads widened significantly, particularly in high yield bonds, as investors priced in higher geopolitical risk impacts. |
Private Credit BDC Spreads High Yield Defaults | |
OilThe conflict in Iran in March sent oil prices sharply higher, altering the outlook for inflation and global monetary policy. Higher liquified natural gas prices sparked fears of a fresh energy crisis that could push Europe's economy into recession. |
Energy Geopolitical Iran LNG Commodities | |
InflationCentral banks will assess the scale of the resulting inflation shock from commodity price increases and decide whether interest-rate hikes will be needed. The outlook has shifted given the scale and likely duration of the commodity shock from Middle East conflict. |
Monetary Policy Central Banks Commodities Energy Rates | |
| 2025 Q3 |
Credit StressCCC-rated corporate bonds have underperformed despite high yields, with investors showing caution toward capital structures at risk of restructuring. Idiosyncratic US defaults highlight credit strains in private credit markets where lending standards have been more lax. |
CCC bonds Default risk Private credit Restructuring Credit quality |
AIThe macroeconomic debate is increasingly focused on the market and economic impact of artificial intelligence infrastructure spending and its potential to drive growth reacceleration in the US economy next year. |
Infrastructure spend Growth acceleration Economic impact | |
| 2025 Q2 |
CreditCredit markets are exhibiting anti-fragile properties with solid fundamentals and improving quality. 70% of euro-denominated high yield is BB-rated. Credit spreads are tight but yields remain at or above long-term averages, creating positive technical backdrop with strong demand from yield-oriented investors. |
High Yield Investment Grade Spreads Quality Fundamentals |
RatesCentral banks are nearing the end of rate-cutting cycles. The ECB cut 25 bps twice but indicated easing cycle is concluding. Fed kept rates at 4.5% with potential cuts later in 2025. 10-year bond yields have not fallen as central banks cut rates, highlighting importance of yield curve positioning. |
Central Banks Fed ECB Yield Curve Duration | |
| 2025 Q1 |
CreditCredit markets exhibited anti-fragile properties through April turmoil, supported by solid fundamentals and improving quality with 70% of European high yield being BB-rated. The fund added credit exposure through index derivatives and shifted allocation to AAA-rated CLOs, benefiting from strong inflows and healthy new issuance pipeline. |
High Yield Investment Grade CLOs Spreads Fundamentals |
RatesGovernment bond yields rose globally with 10-year US Treasury up 24bps to 4.40% and UK gilts up 21bps to 4.65%. The fund reduced duration exposure in US and related markets while managing duration tactically, preferring five to ten-year maturities and using futures for superior risk-reward positioning. |
Duration Yield Curve Government Bonds Interest Rates Futures | |
Trade PolicyThe narrative shifted substantially since President Trump's Liberation Day with risk assets recovering from tariff concerns. The pause in tariffs and de-escalation rendered near-term economic data hard to interpret, with worst-case tariff scenarios being avoided while economic data is being discounted by investors. |
Tariffs Trade War US-China Economic Data Risk Assets |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| No Elevator Pitches found | ||||||||||
| TICKER | COMMENTARY |
|---|---|
| EA | Some one-off issuers also detracted, including Electronic Arts, due to corporate actions |
| Ticker | Put/Call | Amount Bought | Shares Bought | % Change | Weight % |
|---|---|---|---|---|---|
| No Recent Buys Data | |||||
| Ticker | Put/Call | Amount Sold | Shares Sold | % Change | Weight % | Status |
|---|---|---|---|---|---|---|
| No Recent Sells Data | ||||||
| Industry | Prev Quarter % | Current Quarter % | Change |
|---|---|---|---|
| No industry data available | |||
