Rob Burdett (pictured right), multi-manager at Thames River
"My picks would be Legal & General Dynamic Bond and Henderson Strategic Bond. Both have a slightly different methodology."
"Richard Hodges, who manages the L&G fund, makes use of derivatives to hedge against areas he does or doesn’t want to be exposed to while the Henderson fund is much more traditional in its approach. They have a good solid team there."
"We are using strategic bonds for all our fixed interest exposure at the moment because durations are so difficult to get right with interest rate risk running high."
"Having a manager in your portfolio with the expertise to move around the bond space where they see opportunity is what you need."
David Coombs (pictured below), multi-manager at Rathbones
"I only own two Strategic Bond funds. We don’t particularly like fixed-interest at the moment so the ones that are left in my portfolio have got to be pretty good.""L&G Dynamic Bond is a fund we’ve held since it was very small. What we like about Dickie Hodges is that he really is an active strategic bond manager."
"He doesn’t just have the mandate in his armoury, he actually uses it. He is one of the few fixed income managers who have protected capital in long durations."
"We expect to have some periods of underperformance but we think maintaining capital is more important than yield."
"The other one is Loomis Sayles’ Multi-Sector Bond fund. It is not actually in the IMA Sterling Strategic Bond sector but is hedged to sterling. Performance over the last two years has been very, very impressive."
Tony Yousefian (pictured right), multi-manager at OPM
"We currently have about seven per cent exposure to James Foster’s Artemis Strategic Bond fund. We are particularly pleased with James’ asset allocation calls."
"This is very much demonstrated by the fund’s consistently first- and second-quartile performance over the last five calendar years, with the exception of 2008, when the overweight position to bank debt resulted in the fund ending the year in the third quartile."
"By sticking to his guns he managed to more than make up the underperformance over the subsequent years. His asset allocation is very much formulated from his macro calls, which have been spot on."
"We particularly like his current portfolio composition, which is approximately 40 per cent banks, 45 per cent high yield. He is also beginning to build up a short position to the gilt market having successfully made money out of it this year."
Chris Spear (pictured below), managing director at Spear Financial
"I use M&G Optimal Income and Fidelity Strategic Bond a lot. I like Richard Woolnough and Ian Spreadbury because they’ve proven their ability to preserve capital in difficult times and I think that is more important than overall gain.""Most of my clients see investing in bonds as only marginally more risky than cash. Spreadbury was excellent during the credit crunch, second to none."
"The challenges bond managers now face is gilts and interest rate risk. When there are new challenges you want experienced guys with a proven track record."
Marcus Brookes, multi-manager at Cazenove
"The largest holding in my Cazenove Diversity fund is M&G Optimal Income. The attraction is a really talented manager in Richard Woolnough, with the support of M&G, which has one of the best credit desks in London."
"The idea of ‘optimal’ income is interesting to us. Richard can go 20 per cent equities if he wants so if a company has a bond which yields 4 per cent and an equity which pays 5 per cent then why not hold the equity?"
"Cazenove Strategic Bond, managed by Peter Harvey, is also one that we own. Structurally Peter tends to have a lower duration – around two years – so if you think interest rates will go up then this is a good one to have."
"There has never been such disparity among experts about the way inflation is going to go so flexible funds really are the place to be at the moment."