The Ardea Real Outcome Fund is a relative value bond manager which means they aim to generate a return out of bonds by taking a more active trading strategy by buying and selling bonds rather than a traditional buy and hold approach. We believe that in a low-interest rate environment traditional bond funds where there is more of a buy, hold and collect the income approach are unlikely to deliver sufficient returns.

Ardea should be well placed to generate returns from any market inefficiencies in what looks like an increasingly volatile environment for bonds. Since Ardea is not like traditional bond funds we have decided to place it in the “alternatives” category. While we think this is an inherently defensive move it will actually look like a decrease in bond exposure in favour of alternatives at a headline level.

We believe that this is a more conservative stance that will prove more robust in a downturn, in contrast to many industry funds that tend to do the opposite (manoeuvring themselves into lower risk/return peer groups by reclassifying quite aggressive investments as defensive).

• Ardea is a longer term, fundamentally driven, value investor with a focus on liquidity and diversification.

• The investment approach is based primarily on fundamental analysis with a focus on an accurate measurement and disciplined management of risk. Ardea believes that by utilising multiple and diversified investment strategies, they can add value over the medium to longer term.