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Model Portfolio: 29 April 2009
Model Portfolio : 29 April 2009
The month has seen the value of the majority of our holdings creep upwards as the corporate bond market continues its recovery from the oversold lows seen in November last year. The chart of the M&S 5.625% 2014 (see right) illustrates the strength of this move.
Structurally, we have a good spread of maturities - "laddered" from the very short Experian July 2009 all the way out to a 2019 maturity in a Tesco bond. At present, we have nothing in the 2017 area, and this is a gap we hope to fill in due course.
Our positions in the PIBS remain a worry. On the positive side, these intruments continue to pay good coupons, but in price terms the Nationwide issue is showing little sign of recovery as yet. Meanwhile, the outcome for the Bradford & Bingley issue remains uncertain, and is largely at the whim of the government.
Looking forward, we remain overweight cash. This is not particulary by choice, but due to a slight hesistance to pay too much for our bonds.
We continue to keep an eye open for bargains. Hopefully a few new issues will wash up on the shores of the Sterling bond market over the summer. We note how well the Roche 5.5% March 2015 has performed and we would welcome the opportunity to "stag" a few more examples like this.