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We had used the sister fund, OSTFX, for some time when Strategic Income was introduced. Almost without hesitation, after a due diligence review, we began using OSTIX and have been consistently happy with how Carl Kaufman (and later, Simon Lee) has run the fund. Cautious, conservative, capital preservation mandate. M* recently moved it from multi-sector bond, where it had been for a long time, to the high yield group. Of course, had M* done any real digging, they would know that the fund can invest anywhere in the fixed-income market, and have done so over the history of the fund. With the switch in asset classes, the fund went from 5* to 2*. Maybe there is a bright side to this lower rating. Perhaps it will mean slower asset growth, which is not bad from our viewpoint. Anyone who passes this gem up because of M* gaffe and a 2* rating is missing out on a great opportunity. Osterweis Capital Management is one of the very best fund companies in terms of service and careful stewardship of investor dollars.
It is one of the best bond funds out there. Board favorite (and mine) RSIVX seems rather similar and without the possible AUM problem. Another similar fund that few seem to recognize is from Diamond Hill: DHSTX. I believe the M* rating is a common problem for these funds.
Reply to @BobC: There funds look interesting, but are on the pricey side. IMHO they also display a bit more volatility than others in their peer group. That said, I have long been thinking about investing with them.
BobC summed it up best "cautious, conserative, capital preservation mandate" Seems the manager likes to be where the action is but in a very conservative way. It's now primarily a *short* term high yield bond fund, before that it was listed as a multi-sector bond fund and before that in the convertible category. It's rarely a star performer in its particular category, but overall, a real steady eddie of a bond fund.
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