Fund of the Week: Old Mutual Global Strategic Bond

The Old Mutual Global Strategic Bond fund run by Stewart Cowley is one of our star picks in Citywire Selection, which is based on our independent analysis. Senior investment analyst Frank Talbot explains why.

Stewart Cowley is the top manager in the top sector over the last three years, and has outperformed the market in each of the last five calendar years returning an astonishing 76%, while the market has risen 51%.

This startling performance includes a brief stint on the sidelines, while he switched outfits from Bank of New York Mellon to Old Mutual Asset Managers in June 2009.

The fund gives him carte blanche to invest where he wants in the bond market. Recently, he has been increasing his exposure to the corporate world, while reducing exposure to government debt as the yields available to new investors dwindle. He's also moving the portfolio into the commodity currencies of Australian dollar, South African rand and Norwegian krone, where he believes the long-term story is bright.

The fund is a good addition for investors who already hold UK bond funds – while yields are lower, its potential for higher returns and flexible style more than justify investing in the fund.