Wealth Manager - the site for professional investment managers

Register to get unlimited access to Citywire’s fund manager database. Registration is free and only takes a minute.

Old Mutual to launch high yield fund for bond boss

Old Mutual to launch high yield fund for bond boss

Old Mutual Global Investors plans to expand its bond range with a monthly income high yield fund for head of fixed income Christine Johnson

The fund, co-managed by Bastian Wagner, will target income and capital growth through a portfolio that invests predominantly in global fixed and variable rate debt securities.The team will aim to deliver a 6-7% annual yield.

Duration limits will be -3 to 9 years, which the group said will enable it to take advantage of both rising and falling yield environments.

Citywire + rated Johnson currently manages the Old Mutual Corporate Bond and Old Mutual Monthly Income Bond fund. Over the past three years the Corporate Bond fund has returned 29.5% versus a 25.2% rise by the Markit iBoxx Sterling Corporates index. The Old Mutual Monthly Income fund is up 30% versus 34.3% by the LCI iBoxx Non Gilt/Merrill Lynch GBP HY (50:50) index.

Johnson said: 'As bank lending continues to contract, there is an increasing supply of good quality, higher yielding issues.

'The issuing companies are typically from continental – and particularly southern – Europe, long established, with good free cash flows, healthy balance sheets and credible growth prospects.

Co-manager Wagner added: 'Around a third of the market comprises of issues below €350 million and we believe that this part of the market represents a particularly attractive opportunity.

'Companies issuing in this area are in many cases new to the bond market and issues under €350 million are too small to be investible by the mega-funds. For these reasons, they will often offer somewhat better terms to those in the broader market.'

Subject to regulatory approval, the fund is expected to be launched within the next three months. Johnson currently runs the Old Mutual Corporate Bond and the Old Mutual Monthly Income funds. 

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Brewin's Gutteridge: Yuan direction

Brewin's Gutteridge: Yuan direction

This week Brewin Dolphin's research head chats to Fidelity Asian Investment Directors Jenny Lee and Gary Monaghan about the big changes in China.

Play On the Road Challenge: horsing around on the polo pitch

On the Road Challenge: horsing around on the polo pitch

Libby Ashby takes to the polo pitch with Stuart Leigh-Davies from Redmayne-Bentley for an 'On the Road' challenge.

Brewin's Gutteridge: where Miton's Godber sees value

Brewin's Gutteridge: where Miton's Godber sees value

This week Brewin Dolphin's research head talks to George Godber, co-lead fund manager of the Miton UK Value Opportunities fund, about value investing.

Your Business: Cover Star Club

Profile: what tempted Brewin's Glasgow team over to Rathbones?

Profile: what tempted Brewin's Glasgow team over to Rathbones?

Rathbones’ Glasgow office has only been open for three months but the team, led by Angus Kerr, has already attracted new clients

Wealth Manager on Twitter