Canoy will be leaving the company at the end of January 2014. Hodges will take over the Legal & General Fixed Interest trust, Legal & General Managed Monthly Income trust and Legal & General Sterling Income fund. He already manages the Dynamic Bond trust for the group.
The group says the investment process on the funds would not change. The £1.34bn Fixed Income trust and £391m Managed Monthly Income fund are both second quartile over three years, with both funds rising 21.4% versus an average 20% rise in the sterling corporate bond sector. The £660m Sterling Income fund also sits in the sterling corporate bond sector and is up 18.9% over three years, leaving it third quartile.
Hodges previously managed the Monthly Income and Fixed Income trusts from February 2009 to February 2011. His Dynamic Bond trust is fourth quartile over three years having risen 16.1% compared to an average return in the strategic bond sector of 20.6%. However, five year and one year performance figures are stronger.
Hodges said: “I know these funds well and I look forward to managing them. Next year should be an interesting time for investment grade corporate bonds. Economic growth looks positive, so I expect the future path of US and UK interest rates to be a key driver of returns in 2014 and beyond. At the moment I have a strong conviction for assets with less interest rate sensitivity and am actively managing interest rate risk – a theme that is reflected across all our retail funds.”