OMAM's bond team slashes duration

Old Mutual has broadened the parameters of Stephen Snowden's £780m Corporate Bond fund, allowing the manager to move duration to zero to mitigate interest rate risk.

The move is part of a consistent view across OMAM’s fixed income range, which will also see Stewart Cowley’s £397m Global Strategic Bond and Christine Johnson's £29m Dynamic Bond fund move to negative duration for the first time. The Corporate Bond fund formerly had a duration limit of 50% plus or minus the index, which has an average duration of seven years, meaning the fund’s duration could be between three and 10 years. Under the new parameters it can be between zero and nine years. Snowden believes interest rates will be the dominant theme in 2011, and last week begun removing a “...