Five sterling bond funds have managed to deliver first-quartile returns for three consecutive years and continued to outperform in the first half of this year.
In a continuation of a Trustnet series, we identified funds across the IA Sterling Strategic Bond, IA Sterling Corporate Bond and IA Sterling High Yield sectors that have posted a top-quartile return in 2023, 2024 and 2025, while maintaining their first-quartile status up to the end of June 2026.
As seen in the table below, no funds from the high yield sector met these criteria.
Source: FE Analytics
Among the qualifying strategies, the standout performer is the Man Dynamic Income fund, which posted the strongest return of those in the table in each of the three years and again in the first six months of this year.
Managed by FE fundinfo Alpha Manager Jonathan Golan since launch in 2022, the $8.9bn strategy has grown rapidly and carries a five-Crown FE fundinfo rating. Its objective is to provide income and capital growth over the medium- to long-term, employing a bottom-up approach to bond selection. As of 30 June 2026, the fund has a running yield of 6.7%.
The maturity profile is concentrated in the three-to-five-year range, which accounts for 43.5% of the portfolio, while around three-quarters of holdings are rated ‘BBB’, ‘BB’ or ‘B’.
Golan was crowned Alpha Manager of the Year in 2025 by FE fundinfo, while Titan Square Mile analysts described Golan as a young and talented fixed income manager, awarding the fund an ‘A’ rating and including it in the firm’s Academy of Funds.
“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 which are overlooked by larger scale investors,” they said, while warning that smaller issuers can be more susceptible to defaults.
Performance of the fund vs sector over 5yrs
Source: FE Analytics
Golan also manages the Man Sterling Corporate Bond Fund which also sits in the table above. With £1.6bn in assets, the long-only corporate bond fund focuses on sterling-denominated bonds with a flexible mandate across industries and geographies.
The approach mirrors Golan’s philosophy in Man Dynamic Income, according to RSMR analysts, who said: “The focus on identifying undervalued bonds through detailed fundamental analysis provides a clear and repeatable framework for generating returns.”
From Man Group to Royal London, the latter also has two strategies which have posted first-quartile returns in their corresponding sector over three consecutive years and for the first half of 2026.
Royal London Sterling Credit is the strongest performer of the two Royal London strategies in the table, having logged higher returns in two of the three full years and again in the first half of the year. Both are in the IA Sterling Corporate Bond sector.
Managed by Alpha Manager Paola Binns and supported by Alpha Manager Eric Holt, the £2.5bn strategy aims to outperform the Markit iBoxx Sterling Non-Gilts Total Return All Maturities GBP index over rolling five-year periods through capital growth and income, by creating a diversified portfolio that benefits from market anomalies.
More than half of the portfolio (55%) is invested in ‘BBB’-rated bonds, and around half of the holdings mature within five years.
The Royal London credit team’s approach is ultimately benchmark agnostic, with the managers’ philosophy focused on the likelihood of defaults rather than recovery rates.
RSMR analysts said: “In falling yield environments, the fund should perform more strongly than in a rising yield environment.”
Indeed, last year, the fund was highlighted for posting a yield above cash while delivering best-in-class performance over five years.
The other Royal London strategy in the table, Royal London Corporate Bond, is managed by Alpha Managers Shalin Shah and Matthew Franklin. At £1.6bn, it shares the same long-term objective as the other.
Performance of the funds vs sector over 5yrs
Source: FE Analytics
The final fund in the table is the Titan Hybrid Capital Bond strategy, the second IA Sterling Strategic Bond fund to meet the criteria and the smallest in the table at £418m.
Managed by Peter Doherty since 2016, the fund carries a five-crown rating and aims to generate 5% per annum in income, net of expenses, from a hybrid capital portfolio with medium volatility.
The strategy invests in hybrid capital instruments, which sit between debt and equity in the capital structure and can offer attractive yields.
It is worth noting that, prior to its three consecutive years in the first quartile, the fund posted a bottom-quartile loss of 16.7% in 2022.