What concerns me when painting a negative picture is how this might impact on credit and of course his argument is that despite this he can still deliver positive returns
The fixed income sector is very difficult to call; there is a wide range of differing opinions. On one side there is the view that fixed income will struggle to deliver positive returns, on the other side there is the view that there remains plenty of opportunities.
The difficulty is choosing what is the best credit vehicle (government bonds, high yield, investment grade etc) and therefore many investors turn to what are effectively managed bond funds where the managers select the best sectors depending on their view at any given point in time.
One of the most popular funds in this sector is the M&G Optimal Income Fund which investors like and another popular fund is the Jupiter Strategic Bond Fund. This is a newer fund launched in 2008 and with slightly stronger performance.
This is the first time we have heard from the manager so the update was more about understanding his view of the market and where he is finding opportunities.