Overseas lower risk
Bond funds here are of the sovereign variety, so government bonds not corporate bonds, and the currency angle provides a further opportunity to boost growth (though also creates additional risk potential).
Newton International Bond has generated a positive return since the beginning of the year (2.9%), and 10% in total over the last year. Despite the wobble in May/June, when central banks in the US/EU/UK suggested that they might (rather bizarrely) increase interest rates, it remains a reasonable bet that rates will fall in at least two of these areas in 2009, which is supportive of global bonds.
Of the global property funds, the New Star International Property fund is up marginally, and is doing what bricks and mortar is meant to do when other asset classes are very volatile - being boring. The fund still has about 30% liquid, ready to take advantage of opportunities in Europe, with the greatest part of the balance of the fund in Asian bricks and mortar.
As we highlighted, the First State Asian Property Securities fund is at the other end of the risk spectrum, being invested into property shares rather than bricks and mortar. The fund is down 10% so far in 2008, despite property fundamentals in Asia continuing to be robust (low vacancy rates and strong rental growth). The recent sell-off has been indiscriminate, and if you believe that the decades to come will be dominated by Asia (as we do) this fund is undoubtedly a buy.
Macquarie Global Infrastructure Securities, a new fund last time, has been relatively stable since the turn of the year (-0.5%) as we would have hoped. It invests into companies around the globe that provide essential services and have predictable cashflows, where there is huge global demand in the decades ahead for infrastructure investment.
| Co and Fund |
Rating
|
Risk
|
|
|
| Newton International Bond |
Bronze
|
3.1
|
About
|
Buy
|
| New Star International Property |
N/A
|
N/A
|
About
|
Buy
|
| MacQuarie Global Infrastructure |
N/A
|
N/A
|
About
|
Buy
|
For a rating and risk funds need at least a three year track record.
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