A “fat cat” with a “vast pay package” who has of late delivered “paltry returns”; a man that has “done nothing” to shake the stereotype of the “boring” bond fund manager and who – bizarrely – is “no Laurence Olivier”.
This is a flavour of some of the recent criticism levied against M&G’s Richard Woolnough in the money pages of national newspapers. No wonder he admits to being paranoid about the press.
So I arrive for our meeting at M&G’s City offices in mid-November, slightly apprehensive of who exactly I am about to interview. No surprise that this defiant but deferential gentleman is on the defensive.
Yes, his funds have suffered outflows – his flagship Optimal Income Fund is down to around £17bn from its peak of £25bn not so long ago – but, no, this is far from his toughest time in fund management.
No, it is not true that for an hour during the August sell-off you could not get a bid on a US treasury. And, no he is not going to divulge how much of the portfolio could be liquidated in five days should a crisis strike.
With those difficult questions out of the way – thank you, dear readers – we can get to Mr Woolnough’s views on where we are in bond markets today and, in particular, whether wealth managers are right to be worried about a potential liquidity squeeze.
Woolnough has spoken before about how, during 2015, we have entered a bear market for bonds. “It would be very odd if I did not think we were in a bond bear market, given I am short-duration versus my index,” he says – Optimal Income currently has its lowest ever duration at 2.4 years. “I would say from a duration point of view, we are in a bond bear market, but that is the nature of the space.”
Over one year (to 19 November), Optimal Income registered an essentially flat performance – albeit slightly behind the IA Sterling Strategic Bond sector average. But since its launch in late 2006, the fund has delivered a remarkable 87% return, according to FE data.
