The local bond market may be risky but it still offers investors potentially better returns than offshore bonds or cash, managers of multi-asset income funds say. Despite the risk that a ratings agency downgrade presents to the local bond market, the managers of a number of multi-asset income funds this week told an investment conference hosted by investment platform Glacier by Sanlam that they are choosing bonds with shorter terms to maturity and avoiding or investing little in government bonds - and are still finding investment opportunities. The SIM Active Income Fund invests in corporate and government bonds, money market instruments, preference shares and listed property as well as derivatives, and has achieved an annual return of 8.48% for the past 10 years, according to Morningstar. Melville du Plessis, fund manager of the SIM Active Income Fund, says international investors are choosing emerging-market bonds including South African bonds because they offer higher yields desp...
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