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View the article online at http://citywire.co.uk/wealth-manager/article/a636151

Why M&G's corporate bond fund makes A-rated Clive Beagles sad

by Danielle Levy on Nov 21, 2012 at 13:38

‘Equities – regardless of whether GDP growth is 2,3 or 4% - continue to look so much cheaper than the bond alternatives. We all read how much money M&G take on a monthly or quarterly basis and we all know that money is going into their corporate bond-type product.

'That really saddens me. It is not that we want to be running a lot more money, but all the equities we own that have corporate bonds, the equities are yielding more than the corporate bonds and these are equities where the dividends are growing in real and nominal terms.'

'Why would you buy a Centrica 30-year plus bond yielding 4.3% when you can buy the equity on a yield of 5% today and that dividend will grow RPI plus 3-4%? And there are countless examples like that,’ he said.

Elsewhere, the manager remains bullish on domestic-orientated stocks, such as Restaurant Group, and continues to back turnaround stocks 3i and ITV.

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1 comment so far. Why not have your say?

Knowledgable insider

Nov 25, 2012 at 13:38

Yet another analysis that is completely correct - the investment market will be driven by those geniuses at the FSA who's record to date is hardly impressive. Advisers are being forced into funds that suit compliance but not necessarily the investor - so yet another case of' 'the FSA ticks are all in the right boxes' but pity the poor client. You couldn't make this up and yet our political master stand idly by!!!

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