Morgan Stanley Sterling Corporate Bond Class F - Income (GBP)

The fund's relatively defensive approach means it has tended to perform broadly in-line with a rising market and provided some shelter during tougher periods. The fund has done well for investors who've patiently stayed invested over the long-term. Following the announcement of changes to the management team for the fund, how the managers will perform in future is less clear. There are no guarantees and past performance is not a guide to the future.

The managers think superior long-term returns are generated by holding better quality bonds. Although they could provide a lower return than riskier ones when the economy's doing well, they feel these higher-quality bonds will more than make up for this by falling less when bond markets sell off.

The managers start by forming their outlook for the wider global economy, considering the prospects for growth, interest rates, inflation and more.

Then they carry out detailed research on individual companies and bonds. They try to make sure companies have the ability to pay the full interest on their bonds and make the capital repayments too. They also take account of valuations to avoid bonds that could be too expensive, or where the yield is too low to offset the risks they've identified. We think this analysis of individual companies and bonds is one of the team's strengths.

The fund invests heavily in the UK, but includes some global bonds too. Where they invest in overseas bonds, the managers remove the effect of currency exchange rate changes by using derivatives, which can add risk. They also have the freedom to invest in high yield bonds which also adds risk. They never invest more than 20% of the fund in these types of bonds.