While there are many in the investment community who would be happy to forget 2007, “there are two men working away in Mayfair who are pleased it turned out the way it did”, says Jim Robinson in the FT. “They had been expecting it.”
Peter Geikie-Cobb and Paul Thursby, managers of the £263m Thames River Global Bond fund, invest solely in government bonds around the world with the aim not only of making money from the bonds themselves, but also from the currencies they are held in. Right now this is working for them. Last year the fund returned 7.7% and being in bonds rather than equities can’t exactly have hurt performance so far this year.
The fund is also seeing good new inflows of funds as investors flee equities for the perceived safety of bonds. They’re probably making a good move, Thursby told Investment Adviser. If the UK economy continues to slow and government finances go on deteriorating – as it looks like they will – neither sterling nor long gilts in the UK will look like a good place to be. So Geikie-Cobb and Thursby have shifted much of their portfolio over into quality global government bonds.
The managers also steer clear of corporate debt, which they say “incurs equity risks, but without the rewards”. As they tell the FT, “in our investments, we know who owes us money. They pay on the dot, and they always pay back the principle. That is what we offer investors. There is no uncertainty.”
Contact: 020-7360 1200
Thames River Global Fund top ten holdings
Holding, Coupon, Redemption, Yield
UKT, 5.75%, 7/12/09, 9.21%
UKT Bill, 0%, 4/02/08, 8.16%
Germany, 3.75%, 4/01/09, 7.37%
Germany, 3.75%, 13/03/09, 7.33%
Germany, 3.5%, 09/10/09, 6.61%
Germany, 4%, 04/07/09, 6.31%
Austria, 4%, 15/07/09, 5.98%
France, 0%, 25/10/38, 5.19%
UKT Bill, 0%, 07/04/08, 5.52%
EIB, 5.5%, 07/12/09, 3.79%