Bond Fund

[Deleted User]

I'm considering the Mann Global Investment Grade Bond fund, managed by the highly regarded Jonathan Golam. It's a USD 5.6 bill fund containing 340 bonds that are a mix of government and corporates, the average duration is 5.6, the SD is 4.4 and the MS risk level is 33 - the yield to maturity is 6.7. These are short and intermediate bonds with a medium/moderate rating that contain less than 10% junk. My purpose in holding them is as a middle ground alternative to cash and equities.

Do any of the bond experts out there see any compelling reason why this is not a reasonable choice at this time?

https://global.morningstar.com/en-gb/investments/funds/0P0001NT8W/risk

thunderroad88

Golan is a top manager. I’ve held Man Dynamic Income for a few years and it is my biggest bond fund at 5% of my pf. I preferred it because of it’s shorter average duration of just over 2 years and although it holds a higher proportion of lower grade bonds, it’s been less volatile…it has sailed through the Iran turmoil very smoothly for instance. The Global Investment Grade fund is certainly an excellent fund and one I’d consider if and when I look to move beyond short duration, although I’d have to consider manager risk.

[Deleted User]

https://forums.moneysavingexpert.com/discussion/comment/81999339#Comment_81999339

I was attracted to Dynamic Income because of the short duration but felt that the low credit quality made it too risky, only 30% of holdings are =/>BBB.

Man Sterling Corporates is better at 78% =/>BBB but duration takes us into intermediates once again….it really is a trade off.

I think the global investment grade fund probably wins out over the alternatives because the credit rating is higher and the duration, whilst not exactly short, is shorter than the Sterling Corporates option. The real question is whether early intermediates are a good idea currently and my crystal bond stopped working ages ago.

aroominyork

I hold Dynamic Income and Sterling Corporate Bond, and they have single-handedly kept my overall portfolio from sliding against my benchmark while I've been underweight US equities! Investment Grade Opps and Sterling Corporate Bond have similar duration and credit quality; when base rates rose sharply a few years ago, Sterling Corp Bond fell a little more (but quickly recovered) and over the last two years there has barely been a ciggie paper's width between them. My feeling is that Investment Grade Opps might only exist because some people like to see the IG term in fund names (Sterling Corp Bond is also an IG fund) and because - like washing powders - the more brands you have on the shelf, the higher your market share.

https://global.morningstar.com/en-gb/investments/funds/0P0001NT8W/portfolio

https://global.morningstar.com/en-gb/investments/funds/0P0001N8VD/portfolio