Classifications in Fixed Income
Listed below are the Classification Groups in the Fixed Income Asset Type. For more detail on the Morningstar Category Groups please click here.
| Classification Group | Morningstar Categories |
|---|---|
Bond Funds that invest in bonds issued by large, financially stable, companies that could be denominated in or hedged into a specific currency. Yields tend be higher than gilts (government bonds) because companies are not viewed as being as safe as the government. The extent of this difference, i.e. the risk premium, is called the 'investment grade spread'. The higher the spread, the weaker companies (hence the economy) are perceived to be | EUR Flexible Bond |
Convertibles Funds that invest in bonds or preferred stock that may be exchanged for common stock in the company issuing the convertible at a certain ratio and/or a certain price. A convertible security gives the holder a great deal of flexibility | Convertible Bond - Global, GBP Hedged |
GBP Bond Funds that invest in bonds issued by large, financially stable, companies denominated in or hedged into GBP. Yields tend be higher than gilts (government bonds) because companies are not viewed as being as safe as the government. The extent of this difference, i.e. the risk premium, is called the 'investment grade spread'. The higher the spread, the weaker companies (hence the economy) are perceived to be | GBP Corporate Bond |
GBP Government Bond Funds that invest principally in government or explicitly government-backed agency securities denominated in or hedged into GBP. British Government Bonds are called Gilts. Normally these are viewed as being very secure hence their yields are normally lower than corporate bonds | GBP Government Bond |
GBP Index Linked Funds that invest principally in inflation-linked bonds denominated in or hedged in GBP. These differ from conventional gilts because both the coupon and redemption value are adjusted in line with inflation (measured by the Retail Price Index) since the gilt was issued. RPI is measured on an eight month lag for index-linked gilts issued before September 2005 and a three month lag thereafter. Index-linked gilts are attractive compared to conventional gilts during periods of high inflation, but less so during periods of low inflation or deflation | GBP Inflation-Linked Bond |
Global Bond Funds that invest in bonds issued by large, financially stable, companies diversified globally. Yields tend be higher than gilts (government bonds) because companies are not viewed as being as safe as the government. The extent of this difference, i.e. the risk premium, is called the 'investment grade spread'. The higher the spread, the weaker companies (hence the economy) are perceived to be | Global Bond |
Money Market Funds that are pooled investments allowing individual depositors to gain the advantage of wholesale money market interest rates for sterling and other currencies. The fund aims to pay higher interest rates to investors than they could obtain individually but there is an element of risk, however small, in the funds | GBP Money Market |