Managed Bonds (Managed Funds)
Managed Bonds are broad-based funds, which aim to spread the risk for the investor by putting money into a variety of different places. These funds tend to have 'a bit of everything' in them, consisting of shares, gilts, cash and an exposure to commercial property. In fact, the underlying investments are often similar to those held by with-profits bonds.
Managed bonds will tend to underperform equity funds (the stockmarket) when shares are generally zooming ahead. But shares can fall suddenly and sharply. In such a case investors can expect a smoother ride from investing in a managed fund because of its exposure to investments other than just shares.