News & Insights

An opportunity to reset

By Gary Reynolds CFA

20 Jun 2025

Investment

With the economy and interest rates moving, we’re looking to change the mix of bonds in our funds from short-dated funds to medium or long-dated bonds. Why? Because long-dated bonds are on a more normal path now, and that gives us a chance to reset.

COVID kickstarted the economy

COVID temporarily damaged global supply chains, but it also helped central banks to escape deflation and get positive price rises back into their economies. This may have boosted inflation, but it also improved real wages.

Withstanding interest rates

Despite everyone thinking in the early 2000’s that we couldn’t withstand interest rates greater than 2%, we have. But it has enacted a few changes, including how people are thinking about bonds. Bonds were, until recently, negatively correlated to equity movements (meaning the two asset prices tend to move in opposite directions).

This was because of how the Central Bank purchased bonds if they thought the economy was lagging. This made them incredibly popular, even with low yields of 1% or 1.25%, which gave no compensation against inflation.

The August 2022 budget

The Truss/Kwarteng budget of August 2022 shocked the long-term gilt market, meaning many holding long-term bonds lost money. However, long-term gilts are on a more normal path now, which excites our Investment Team.

An increase in returns

It means that we can probably expect to have an increase in overall returns (or at least nominal, lower, probably real returns), because inflation’s going to run a little hotter. But for us, this is an opportunity to reset.

How this changes our funds

We are looking at reassessing the Investment Grade Bond fund, changing how we’ve been investing and putting in some duration (being prepared to hold longer-dated bonds).

Long-dated bonds pay a little more than holding short-dated bonds, so adding them into the portfolio mix could increase returns.

Gary Reynolds CFA Chief Investment Officer

Important information 

 Past performance is not a reliable indicator of future returns. The value of investments, and the income from them, can go down as well as up and is not guaranteed and you may not get back the amount originally invested. Any forecast, projection or target where provided is indicate only and is not guaranteed in any way. Certain types of funds might carry a greater investment risk than other investment funds. Further details of the risks are associated with investing in Courtiers funds can be found in the Key Investor Information Document or Prospectus, copies of which are available on request or at www.courtiers.co.uk. 

Disclaimer 

This communication is for information purposes only and should not be relied upon in making an investment decision. The views expressed by individuals and the business are based on market conditions at the date of issue and are subject to change without notice. The mention of any stocks or shares should not be taken as recommendation to deal and does not take into account the individual investor’s investment objective or risk profile. Where an investment or security is denominated in a different currency to the investor’s currency of reference, changes in rates of exchange may have an adverse effect on the value, price or income of or from that investment to the investor. Any third-party sites, or pages which are linked to the document, have not been reviewed by us and therefore we accept no responsibility for the authors or content of external link or pages. If you are interested in any of Courtiers Asset Management Limited’s range of funds, or require any financial advice, please speak to a financial adviser. 

Issued by Courtiers Asset Management Limited, CAM0625095, Courtiers Asset Management Limited is Authorised and Regulated by the Financial Conduct Authority – Register No: 616322. Address: 18 Hart Street, Henley-on-Thames, Oxfordshire RG9 2AU. Tel: 01491 578368. 