150. The firms paying off their pandemic debt

Lesley Dunn, co-manager of Baillie Gifford Strategic Bond fund, talks to us about how company balance sheets are recovering after the pandemic. She discusses the amount of money firms had to borrow to keep themselves afloat in lockdown, the price they had to pay to do so, and how some are now looking to reduce their debt. Lesley also gives her view on inflation and discusses the investment case for Netflix’s bond – despite the company “burning cash” in its bid to create original content.
Apple Podcast Spotify Podcast

Baillie Gifford Strategic Bond gives investors access to a concentrated portfolio (typically 60-80 stocks) of primarily UK fixed income securities, from both the investment grade and high yield segments of the market. Unlike many of their peers in the strategic bond sector, the managers aim to add value almost exclusively through their stock-picking prowess and do not aggressively manage interest rate exposure.

Read more about Baillie Gifford Strategic Bond

What’s covered in this podcast:

  • Are companies really recovering quickly from the pandemic? [0:31]
  • How many companies issued bonds during lockdown and at what cost [2:49]
  • The example of Booking.com having to borrow money to see it through 2020 [3:44]
  • If companies can pay back debt early if they want to [5:29]
  • Whether the manager is finding more opportunities in investment grade or high yield bonds [6:35]
  • The manager’s view on inflation [9:14]
  • Why the manager likes Netflix’s bond [12:02]
  • Which other bonds are held in the portfolio [13:53]
This article is provided for information only. The views of the author and any people quoted are their own and do not constitute financial advice. The content is not intended to be a personal recommendation to buy or sell any fund or trust, or to adopt a particular investment strategy. However, the knowledge that professional analysts have analysed a fund or trust in depth before assigning them a rating can be a valuable additional filter for anyone looking to make their own decisions. Past performance is not a reliable guide to future returns. Market and exchange-rate movements may cause the value of investments to go down as well as up. Yields will fluctuate and so income from investments is variable and not guaranteed. You may not get back the amount originally invested. Tax treatment depends of your individual circumstances and may be subject to change in the future. If you are unsure about the suitability of any investment you should seek professional advice. Whilst FundCalibre provides product information, guidance and fund research we cannot know which of these products or funds, if any, are suitable for your particular circumstances and must leave that judgement to you. Before you make any investment decision, make sure you’re comfortable and fully understand the risks. Further information can be found on Elite Rated funds by simply clicking on the name highlighted in the article.

More Episodes