Wealth Manager - the site for professional investment managers

Register to get unlimited access to all of 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.

Related Fund Managers

Christine Johnson
Christine Johnson
7/50 in Bonds - Sterling Strategic Bond (Performance over 3 years) Average Total Return: 38.29%
Citywire TV
Citywire TV
Citywire TV
Play Where A-rated Pattullo is finding the best bond opportunities

Where A-rated Pattullo is finding the best bond opportunities

Henderson Global Investors head of retail fixed income explains how he is managing his fund against the surprise current monetary policy divergence.

1 Comment Play Taxicab Tenner: Allianz Global Investors' AA-rated Simon Gergel

Taxicab Tenner: Allianz Global Investors' AA-rated Simon Gergel

Our much anticpated new series is here! We hand a black cab driver a tenner and grill the manager of the 125-year Merchants trust until the meter runs out.    

Play Europe bulls, a retail boost and why a little inequality can be a good thing

Europe bulls, a retail boost and why a little inequality can be a good thing

This week’s Investment Pulse looks at whether investors should be bullish on Europe, the surprise rise in UK retail sales and if a little inequality is a good thing.

Your Business: Cover Star Club

Profile: meet the duo at the heart of Hargreave Hale's succession plan

Profile: meet the duo at the heart of Hargreave Hale's succession plan

For the first time in the company's history a non-Hargreave is now at the head of the north west broker and asset manager

Wealth Manager on Twitter