"Managing a bond fund these days is a peculiar business. Global central banks have aggressively supported government bonds, driving up—many would say distorting—their prices. Market observers generally agree that support will eventually ebb, bringing prices back down and bond yields up, but no one can be certain when. What is an investor to do?"
Stewart Cowley manages $1.5 billion in the Old Mutual Global Strategic Bond Fund. One place he generally avoids investing that money: bonds.
Mr. Cowley doesn't hold conventional U.S. Treasury bonds. He doesn't hold traditional U.K. gilts. He doesn't hold Japanese government bonds.
"I'm the bond manager who doesn't like bonds," he says, sitting in the modern London headquarters of Old Mutual Global Investors, a unit of Old Mutual ODMTY +5.18% PLC, which is a venerable City institution with roots going back to 19th-century Cape Town, South Africa.