OMAM switches back to negative duration after Libya

Old Mutual Asset Management's bond funds have moved back into negative duration after a temporary switch to positive duration at the start of the Middle East crisis.

Stewart Cowley’s £419m Global Strategic Bond fund and Christine Johnson’s £33m Dynamic Bond fund started with a negative duration of minus three years, but moved into a positive position of four years for 10 days when the Libya crisis began on 14 February. However, Johnson says the sensitivity of the global economy to the oil price and the consequences of the situation in the MENA region have actually reinforced rising developed market government yields. “With that in mind, our original negative duration view is actually supported. Yes, things have changed, but the original investment...