RLAM's Vaid bets on rise of asset backed securities

Asset backed securities (ABS) are presently the most attractive section of the corporate bond market, according to Royal London's Sajiv Vaid.

The manager of the £384m Corporate Bond fund says these bonds have suffered fewer defaults than expected and offer plenty of scope for price appreciation. "During the credit crunch the sector was seen as toxic. 
People did not like ABS because of its association with sub prime," he says. "What we are seeing now is a rehabilitation of the sector." Vaid says his fund's increased exposure to ABS has contributed to its recent strong performance. It delivered 7.4% over the six months to 8 June, compared to the IMA Corporate Bond sector average of 3.8%. "I like ABS because they pro...