Rathbones' Moore urges caution over strategic bond sector

Warning the sector is a "catch all"

Investors must tread more carefully than ever when allocating capital to the IA Sterling Strategic Bond sector, according to Rathbones' Alex Moore, who is upping quality across clients' portfolios.

The firm's head of collectives, who replaced Mona Shah in the role last year, favours strategic bond funds because of their flexibility, but echoed warnings the sector is a "catch all" and houses a wide range of varying risk mandates, particularly as markets enter "late-cycle". "If funds in the sector are predominantly focusing on income, they will typically have a natural long-term bias to high yield. That in itself is not a bad thing.  "Sometimes, buying a strategic bond fund that has a bias to high yield can be preferable to buying a pure high yield fund because they can use deriva...