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.
News sponsored by:
As the UK coalition government strives to rebalance the national economy, so called 'reshoring' looks set to play an increasingly important role in economic recovery.
Today's top headlines
With talk on interest rates on the horizon, our latest roundtable debate covers income investing against a changing backdrop
More about this:
Look up the funds
Look up the shares
- Standard Life PLC (SL.L)
- Hargreaves Lansdown PLC (HRGV.L)
- ITV PLC (ITV.L)
- 3i Group PLC (III.L)
- Restaurant Group PLC (RTN.L)