Royal London Sterling Extra Yield Bond: is it a strategic bond fund?

sooras

Slightly out of context question on this fund here.
I am a newbie to investing. I have a fair understanding now how the return is generated in this fund especially after reading this forum. But I am confused if buy this fund through some investment platform, can I sell this fund like any other normal equity based funds whenever I would like ? Or is there some kind of lock-in period for these type bond funds?
Your answers will be much appreciated as I am struggling to find this bit of information from the web.

ColdIron

It's a normal OEIC, so you can sell it just as you would an equity based OEIC

Linton

rathernot wrote: »

Does anyone consider a fund like this a viable alternative for the "government" bond part that most seem to advise?

I get how government bonds are supposed to protect you by bringing some safety but when returns are so low do they actually give much real world benefit?

A high yield bond fund is not an alternative to a safe developed world government bond fund, it is a distinct investment vehicle with its own benefits and risks. For a small investor cash is arguably the only viable alternative to gilts at the moment. Safe government bonds are much more useful to companies and institutional investors. If you have the odd £10M spare its easier, cheaper, and safer to hold it as gilts rather than try to pay it into your highstreet bank.

aroominyork

I have posted elsewhere that I see the RL Sterling Extra Yield as much closer in risk/return to an equity fund than to a strategic bond fund. If you map RL against FTSE All Share against M&G Optimal Income (M&G being the largest cautious strategic bond fund) since March 2007, you will see:
- RL and FTSE both fell c.40% in 2008/09 while M&G fell about 10%
- RL and FTSE have followed similar trajectories since then (although RL’s is a much smoother curve).

So I do not see RL as providing a cautious bond fund for your portfolio. It may keep topping the strategic bond tables during bull markets but could perform badly in a downturn.