Old Mutual Dynamic Bond Class A Inc

In general the UK economy remains weak, according to Christine Johnson, manager of the Old Mutual Dynamic Bond Fund. This wider economic uncertainty, coupled with political and policy risk are currently having a significant influence on financial markets. She believes this, along with continued deliberation on how to deal with excessive debt in the West, will continue to cause stock market volatility. In both cases she sees positive, if piecemeal, outcomes in the short term.

Presently, she believes selected banks represent good value. She is focusing on "national champions" such as Barclays, HSBC and Standard Chartered, which have rebuilt their balance sheets following the financial crisis and could benefit from the rising prosperity of the middle classes in emerging markets. Within the financial sector she also has exposure to insurance companies, preferring those with a global presence who could benefit from changing demographics. Aviva, AXA and RSA all feature in the portfolio.

Given the precarious state of the Western consumer - many are over indebted and being hit by austerity measures - Christine Johnson is generally avoiding companies reliant on discretionary consumer spending.

The flexibility offered by strategic bond funds has proven popular with long term investors. They allow managers to invest across the fixed income spectrum ranging from gilts, to investment grade bonds, and riskier high-yield securities. This can take pressure off investors as it is the manager who makes the decision when to switch between the different types of bond. This fund can feature investment in emerging markets and derivatives which increases risk. This fund does not currently feature on the Wealth 150 list of our favourite funds in each sector.