Morgan Stanley Sterling Corporate Bond Class F - Accumulation (GBP)

The fund's relatively defensive approach means it has tended to underperform a rising market, but provide some shelter during tougher periods. It performed particularly well around the financial crisis in 2008, for example. Having provided some shelter during difficult market conditions, the managers have also captured some gains as markets have performed well again in recent years. As a long-term investment, the fund has done well for investors who've patiently stayed invested. We think the managers have the potential to serve long-term investors well, but there are no guarantees and past performance is not a guide to the future.

The managers think superior long-term returns are generated by holding better quality bonds. They'll provide a lower return than riskier ones when the economy's doing well. But they think the higher-quality bonds will more than make up for this by falling less when bond markets sell off.

The managers start by coming up with their outlook for the wider global economy. This includes their views on growth, interest rates, and inflation among other things.

Then they carry out detailed research on individual companies and bonds. They try to make sure companies have the ability to pay the full interest on their bonds and make the capital repayments too. They also take account of valuations to avoid bonds that could be too expensive, or where the yield is too low to offset the risks they've identified. We think this analysis of individual companies and bonds is one of the team's strengths.

The fund invests heavily in the UK, but does include some global bonds. The mangers remove the effect of changes in exchange rates on overseas bonds by using derivatives, which can increase risk.