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Old Mutual goes for all in one formula


Old Mutual Dynamic Bond Fund

Unit trust

Income and growth by investing in fixed-interest securities

Minimum investment:
Lump sum £1,000,
monthly £250

Investment split:
100% in fixed-interest securities

Isa link:

Pep transfers:
Initial 3.5%,
annual 1.25%

Initial up to 3%,
renewal up to 0.5%

Tel: 0808 100 2715

The Old Mutual dynamic bond fund is a unit trust that invests in a range of fixed-interest securities, including high yield and investment grade corporate bonds, government bonds and convertibles to provide a monthly income.

Bright Financial Services sales director Paul Breaks points out that Old Mutual&#39s international bond and corporate bond funds are good performers. With this fund, Breaks believes there is no need for clients to hold separate gilt and high-yield bond funds. He says: “This is, for all intents and purposes, a managed fixed-interest fund aiming to provide growth and income.”

Breaks believes the monthly high income will be attractive to clients but the net yield of 4.93 per cent is less so. He feels the literature & commission is okay and standard respectively.

Looking at the drawbacks of the fund Breaks says: “The fund can invest in non-investment grade bonds, so there is additional risk of defaults. Also, the charges are taken from income which reduces the yield.” He sees competition coming from distribution funds.

Summing up Breaks says: “This fund has a good, well respected, experienced team led by Theresa Egan. It would complement an equity portfolio but non- investment grade bonds increase the risk to capital.”


Suitability to market: Good
Investment strategy: Good
Charges: Average
Adviser remuneration: Average

Overall 7/10


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