In recent years investors have taken refuge in government bonds in the UK and abroad, snapping up what many consider to be one of the most risk-free investments in the market.
UK gilts in particular - alongside US treasuries - have been snapped up with increasing frequency by investors desperate to protect their money from the volatility in equity markets, amid fears over a global slowdown.
An unprecedented rush into gilts forced prices higher and pushed yields to record lows, as investors opted for safe havens over returns.
However, the rally left many fixed income managers wrestling with the conundrum over whether to hold on to gilts and other assets as a hedge against a sell-off, or cash in and hunt for some higher yielding assets.
Bond managers who thrived during gilt sell-off
Yields on gilts hit record lows in the summer, falling to 1.407%, before rebounding back near 2% in mid-September, catching out scores of investors. They have subsequently fallen again amid fears over the US fiscal cliff, but remain well above lows, currently trading at 1.77% today.
But which managers thrived during the gilt sell-off?
Below we outline the top ten Strategic Bond funds from the IMA Strategic Bond sector that have outperformed since the August low.
Top performers include Adrian Frost's (pictured) and Adrian Gosden's Artemis High Income fund, the Invesco Perpetual Tactical Bond fund, run by Paul Causer and Paul Read, and the St James's Place Corporate Bond fund, run by David Todd.
|Name of fund||Manager||Rank||Return|
|Artemis High Income||Adrian Frost, Adrian Gosden||1||9.33|
|IP Tactical Bond Acc Gross||Paul Causer, Paul Read||2||8.90|
|St James's Place Corporate Bond Inc||David Todd||3||8.75|
|Royal London Sterl Extra Yld Bd B||Eric Holt||4||8.56|
|AXA Framlington Managed Income Inc||George Luckraft||5||8.09|
|Premier Strategic High Income Bond A Inc||Paul Smith||6||7.70|
|Skandia Strategic Bond EUR Hedged Acc||Adam Smears||7||7.53|
|Skandia Sterling Bond||24 Asset Management and Skandia||8||7.28|
|Henderson Fxd Intr Mthly Inc EUR Hdg Inc||Jenna Barnard||9||6.86|
|Old Mutual Dynamic Bond Acc||Christine Johnson||10||6.49|
|Peer Group Average||4.12|
Source: Morningstar data compiled between 02/08/2012 to 15/11/2012
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