Old Mutual Corporate Bond - downgrade

By ROBERT HARLEY 15/09/2008

• EMAIL
• PRINT
• SUBSCRIBE

Since the credit crunch started to impact mainstream credit markets in mid 2007 the Old Mutual Corporate Bond fund has under performed relative to its peer group. The fund went into this market downturn carrying above average credit risk, and, given the illiquidity in the market, the manager has struggled to reposition the portfolio. This has resulted in the fund taking above average write downs on the value of its underlying holdings. It is difficult to envisage when markets might resume some sort of normality, but in the meantime the manager is handicapped by poor market liquidity and potentially high costs associated with re-positioning the portfolio. In view of this uncertainty and the level of volatility currently being experienced by the fund relative to the peer group, we believe it is prudent to reduce our rating on this fund to a hold.

top of form  

Email this page to a friend

Please fill in the form below then click Send article.

Your name *

Your email address *

Friend's name *

Friend's email *

Enter a brief message

Please enter the code shown above

Values delayed by at least 15 minutes.
Source: Financial Express