Emma Wall: Hello, and welcome to Morningstar TV. I'm Emma Wall and you're watching a brand new series, where we ask fund managers what their top picks are. Here with me today is Chris Bowie, Head of Credit at Ignis. Hello, Chris.
Chris Bowie: Good morning, Emma.
Wall: So what are your three top picks?
Bowie: I would start with sector picks that I have really. Our favourite sector is secured bonds. We like bonds where you have physical asset-backing protecting you as a creditor if the company is into trouble. Good examples of investments in that sector would be say Tesco Property or Sainsbury's or even BT who issue bonds under the name Telereal.
So what happens there is, you have a credit exposure to the company, but if the company gets into trouble, you can physically reclaim those assets to protect you as bondholders. We're very overweight that sector.
The other two sectors we like are actually not credit at all even though we're running credit funds. Because we are defensively positioned, we actually have an overweight position in gilts. We like the security of protection from credit spreads widening, but also the duration management aspect of gilt, so we can buy short-dated gilts very cheaply.
Over and above that, our third sector pick is actually cash. We've got about 6% in cash ready to invest in new issues should we get attractive new issues coming to the market.
Wall: Thank you, Chris.
Bowie: Thank you.
Wall: This is Emma Wall for Morningstar TV. Thank you for watching.