“When it comes to government bond markets, we do believe that investors can be making small positive returns,” he said, adding that this is because of long term protection of government bonds.
In the Strategic Global Bond Fund he runs with Phil Milburn, Roberts allocated 28.8% of assets to government bonds.
A key reason why investors continue to buy fixed income as an asset class is its history of returns.
“There has not been two consecutive years of negative total returns on government bonds,” Roberts said.
He holds 5.4% in Swedish government bonds, in which he is long. This is followed by 4.4% in Belgian government bonds, 4.10 in Australian bonds and 3.5% in US Treasury bonds.
Emerging market debt is looking favourable, Roberts noted. He has increased the exposure of the fund to emerging markets to 4.9%.
“We’re gently buying into assets that are the best value in emerging markets. Our mantra is to avoid buying into a single asset class, and we use derivatives in other parts of the portfolio to balance risk.”
The Strategic Global Bond Fund has seen a cumulative performance of 15.7% over the past three years, compared to the cumulative performance of the IMA Global Fixed Income index of 10.6%, according to FE Analytics.
