Bond funds from Royal London and Man Group have surged in their first three years, according to research by Trustnet, but not all fixed-income portfolios that turned three in 2025 enjoyed the same success.
The past few years have been mixed for bonds. Rising interest rates in 2022 caused prices to plummet, impacting capital returns, but with rates slowly coming down over the past two years, there have been gains to be had.
No fund in the IA Sterling Strategic Bond sector has done a better job of making its investors money over the past three years than Man Dynamic Income, which has returned 65.3% over three years to the end of 2025.
Performance of fund vs sector over 3yrs
Source: FE Analytics. Data to the end of 2025.
Managed by FE fundinfo Alpha Manager Jonathan Golan, who was crowned Alpha Manager of the Year in 2025, the £4.5bn portfolio invests in bonds issued by countries and companies around the world, with Europe, North America, Latin America and the UK currently its most fertile hunting grounds.
Analysts at Titan Square Mile have given the fund an ‘A’ rating. They said: “This fund is a good option for those investors who wish to access potentially strong returns from global credit markets but who are also willing to endure periods of elevated volatility.”
They described Golan as a “young, talented fixed income manager” who is “passionate about credit selection” and has delivered strong returns since he began managing credit strategies in 2017.
“A key differentiator for this fund, and we would argue its edge, lies in its bottom-up focus on smaller issuers and the team's ability to extract alpha from undervalued credits that are overlooked by larger scale investors,” they said.
However, investing in smaller issuers comes with risk, as these can be more susceptible to defaults. Prices can also be volatile, as a 'liquidity squeeze' in credit markets could impact the portfolio more significantly than those invested in larger issues.
“Since smaller issues can be more volatile, this may lead to larger drawdowns,” the analysts said.
Additionally, the fund’s penchant for investing in under-the-radar bonds means that capacity management is “paramount” for the strategy to continue as intended, as more assets could push the fund to invest in larger issues. As such, the analysts noted that some share classes are now soft-closed to investors.
Overall, Titan Square Mile analysts said they expect the fund to generate strong returns over the long term but with above-average volatility.
Source: FE Analytics
MGTS Progeny Dynamic Bond was the next-best of the young performers, with a 16.6% return, placing it in the third quartile of the peer group.
MGTS Progeny Systematic Bond and Muzinich Dynamic Credit Income have had even more difficult starts, with bottom-quartile gains between 2023 and 2025 of 11.9% and 11.3%, respectively.
Meanwhile, the only new entrant to the IA Sterling Corporate Bond in 2022 was the Royal London Sustainable Short Duration Corporate Bond. It has made a good start for investors who backed it early on, with a 22.1% return placing it in the top quartile of the peer group.
Managed by Matthew Franklin and Alpha Manager Shalin Shah, the £147m portfolio invests in issuers that score positively on one or more of its sustainability themes: clean, healthy, safe and inclusive.
Around 70% of the portfolio is invested in this way, with the remaining 30% invested in bonds from issuers that do not conflict with the sustainability goals above but do not need to specifically match the criteria.
It is significantly underweight in higher-quality AAA bonds, instead focusing more on BBB issuance. It also uses a barbell approach to duration, with around 20% invested in bonds that mature within 12 months, while some 54.9% has more than three years before maturity.
Shah and Franklin run several strategies together, including the £1.7bn Royal London Corporate Bond and £264m Royal London Sustainable Corporate Bond funds.
The latter is recommended by analysts at FE Investments, who said the managers are “well experienced in credit investing and operate a disciplined approach to fundamental credit analysis”.
This article is part of a series in which Trustnet looks at funds launched in 2022. To maintain consistency, we have looked at performance over the three years from the start of 2023 to the end of 2025. Previously, we have looked at the US and UK sectors.