Newton's Brain to up allocation to developed market sovereign debt

Paul Brain plans to increase his allocation to developed market sovereign debt in his Newton Global Dynamic Bond fund from 5% to 30% over the next few months.

Brain, the head of Newton’s global fixed income team, plans to reduce the Global Dynamic fund’s large overweight to credit and bring the vehicle close to its neutral weightings. The £295m portfolio is currently 67% allocated to corporate debt, while the neutral position is 25% in each of investment grade and high yield corporates. “Up until a few weeks ago we would have recycled money from profits from high yield back into credit, but now we are starting to shift the proceeds into government bonds,” Brain says. “The market and governments are focused on sovereign credit risk, which...