Old Mutual Global Strategic Bond Fund

for investors this is a fund with a poor track record but a new team with a different mandate

We haven’t shied away from the fact that we feel that investing in bonds will be challenging moving forward. The returns we have had in the past are unlikely to repeat in the future and investors need to accept greater volatility.

Of course some investors may consider alternative investments to bonds but others will consider these the best way to counter the risk of equities. What is worth considering is the Barclays Gilt Study (2013) which showed returns from bonds would likely be around the 2% p.a. mark and equities 5% p.a. Perhaps now we are starting to move to that position.

Choosing the right place to be in the bond market is tricky and therefore there is a strong argument to choose a strategic bond fund where the manager chooses the sectors to invest in. The space is a crowded one and comparing performance is difficult. In this case I have compared to the M&G Optimal Income Fund which follows a similar strategy (although can use equities) and JP Morgan Global GBI Unhedged Index which it aims to beat.

This is a short update on the fund and further updates will focus more on the holdings.

Fund Facts Morningstar

Notes

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