Trustnet Limited (“we”, “our”, “us” and derivatives) are committed to protecting and respecting your privacy. This Privacy Policy, together with our Terms of Use, sets out the basis on which any personal data that we collect from you, or that you provide to us, will be processed by us relating to your use of any of the below websites (“sites”).

For the purposes of the Data Protection Act 1998, the data controller is Trustnet Limited of 3rd Floor, Hollywood House, Church Street East, Woking, GU21 6HJ. Our nominated representative for the purpose of this Act is Kirsty Witter.


We collect information about you when you register with us or use any of our websites / services. Part of the registration process may include entering personal details & details of your investments.

We may collect information about your computer, including where available your operating system, browser version, domain name and IP address and details of the website that you came from, in order to improve this site.

You confirm that all information you supply is accurate.


In order to provide personalised services to and analyse site traffic, we may use a cookie file which is stored on your browser or the hard drive of your computer. Some of the cookies we use are essential for the sites to operate and may be used to deliver you different content, depending on the type of investor you are.

You can block cookies by activating the setting on your browser which allows you to refuse the setting of all or some cookies. However, if you use your browser settings to block all cookies (including essential cookies) you may not be able to access all or part of our sites. Unless you have adjusted your browser setting so that it will refuse cookies, our system will issue cookies as soon as you visit our sites.


We store and use information you provide as follows:

We may also send you emails to provide information and keep you up to date with developments on our sites. It is our policy to have instructions on how to unsubscribe so that you will not receive any future e-mails. You can change your e-mail address at any time.

In order to provide support on the usage of our tools, our support team need access to all information provided in relation to the tool.

We will not disclose your name, email address or postal address or any data that could identify you to any third party without first receiving your permission.

However, you agree that we may disclose to any regulatory authority to which we are subject and to any investment exchange on which we may deal or to its related clearing house (or to investigators, inspectors or agents appointed by them), or to any person empowered to require such information by or under any legal enactment, any information they may request or require relating to you, or if relevant, any of your clients.

You agree that we may pass on information obtained under Money Laundering legislation as we consider necessary to comply with reporting requirements under such legislation.


We want to ensure that the personal information we hold about you is accurate and up to date. You may ask us to correct or remove information that is inaccurate.

You have the right under data protection legislation to access information held about you. If you wish to receive a copy of any personal information we hold, please write to us at 3rd Floor, Hollywood House, Church Street East, Woking, GU21 6HJ. Any access request may be subject to a fee of £10 to meet our costs in providing you with details of the information we hold about you.


The data that we collect from you may be transferred to, and stored at, a destination outside the European Economic Area (“EEA”). It may be processed by staff operating outside the EEA who work for us or for one of our suppliers. Such staff may be engaged in, amongst other things, the provision of support services. By submitting your personal data, you agree to this transfer, storing and processing. We will take all steps reasonably necessary, including the use of encryption, to ensure that your data is treated securely and in accordance with this privacy policy.

Unfortunately, the transmission of information via the internet is not completely secure. Although we will do our best to protect your personal data, we cannot guarantee the security of your data transmitted to our sites; any transmission is at your own risk. You will not hold us responsible for any breach of security unless we have been negligent or in wilful default.


Any changes we make to our privacy policy in the future will be posted on this page and, where appropriate, notified to you by e-mail.


Our sites contain links to other websites. If you follow a link to any of these websites, please note that these websites have their own privacy policies and that we do not accept any responsibility or liability for these policies. Please check these policies before you submit any personal data to these websites.


If you want more information or have any questions or comments relating to our privacy policy please email [email protected] in the first instance.

Keyword Search

 Calculator Calculator
Time Zone Time Zone
You are here:  FE Trustnet     Education        Absolute Return Bonds Guide

Absolute Return Bonds Guide


Operational Risk Management
In addition to managing the risks inherent in the derivatives themselves, an absolute return bond fund will acquire 'incidental' exposure to the risk of default of the counterparty with whom the deal is transacted, and this also needs to be managed. There are industry-standard methods for mitigating this risk.
There are also risks associated with the valuation, administration and settlement of derivatives. Here positions should be marked-to-market and valuations carried out independently. Where practical, quotes from several market makers should be sourced, or if this is not practicable other means should be used to verify that the price supplied by the market maker when a position is marked-to-market provides a reasonable estimate of its underlying value.

Fund Management - What fund management credentials are needed?
To manage this type of fund successfully, it is essential that the fund manager has a thorough understanding and practical experience of the full range of global bond markets and of the derivative instruments based around them.
The manager therefore needs to have considerable knowledge of the major government bond markets, as well as a thorough grounding in the factors driving the smaller, higher yielding emerging markets of Asia, Latin America and Eastern Europe. The manager also needs to have a good understanding of the factors influencing corporate bond markets for both the investment grade and high yield sectors.
It is crucial that the manager has the necessary expertise to accurately gauge the factors driving the performance of these markets. In particular, he needs to be able to access a wide range of economic data to help determine the likely trends in economic growth, inflation and interest rates, which are particularly relevant for government bond markets. For corporate bonds, both the economic and company environment require careful analysis. A successful bond strategy also requires the rigorous assessment of the likely patterns of future supply and demand for the various types of bonds as well as the relative attractiveness of different bond classes.
Indeed, such is the complexity and diversity of today's bond markets and derivatives that it takes a large, well-resourced investment team to make the most of the opportunities available. It is helpful if the fund manager is also able to draw on the specialist expertise of his colleagues. Consequently, it is vital that the company managing an absolute return bond fund has the critical mass to run this type of portfolio. Rigorous controls, such as stop-loss limits and the permissible amount of leverage, are vital tools in the management of an absolute return bond fund.
Previous Section «
Next Section »

Back to top of pagetop