KAMES Capital’s Stephen Snowden has topped The Herald’s latest league table of Scottish fund managers after rising from 585th to 483rd place in financial information group Citywire’s ranking of over 3,000 global managers.

The Edinburgh-based manager, who runs Kames’ Investment Grade Bond and Investment Grade Global Bond funds and is AA-rated by Citywire, narrowly beat fellow Kames manager Euan McNeil to the top spot.

Mr McNeil, who co-manages the bond funds with Mr Snowden in addition to managing the Kames Ethical Corporate Bond Fund, ranked second in the Scottish table and 500th in the global one, which is based on three-year risk-adjusted performance.

Over the three years to the end of February the Investment Grade Bond Fund made an average annual return of just over six per cent, with negative growth in the year to February 2016 causing a drag on its performance. In the year to February 2017 the fund grew by just over 10 per cent.

Similarly, the global fund made an average annual return of just over four per cent during the period, with growth of just over seven per cent in the final year.

According to Mr Snowden, the funds have benefitted from the bond markets confounding expectations for a prolonged period of time.

“The textbooks tell you that when interest rates go up you lose money in bonds,” he said.

“People have been predicting that interest rates will go up for a long period of time and there have been many market commentators predicting a material fall in the bond market for close to five years now. Unfortunately for them it just seems to keep ploughing ahead.

“On the whole the last three years have been a very good period to invest in either bonds or equities and interest rate rises have not come through anywhere near as aggressively as people have been predicting.”

Mr Snowden said that both his funds typically have around 150 holdings, which “relative to our peer group and the competition is quite a concentrated portfolio”.

As bonds are essentially loan contracts, the money the funds invest is treated as such, with the companies paying regular sums in return for being loaned the money for a set term. At the end of the term the amount loaned gets paid back too.

Mr Snowdon said the funds invest in bonds with a blend of maturity dates ranging from one year up to 30.

Among the holdings he particularly likes at the moment is a bond issued by the BBC that is secured on its former premises in White City in London.

“In the glory days the BBC had nice offices in London but then they moved a lot of people up to Salford and vacated the property in White City,” he said.

“They had a 30-year lease on the property which they are committed to paying for. The BBC have to pay me until 2035. Sooner or later the BBC will try to cut a deal to break that lease and when they do I’ll get paid money.”

Another is from National Air Traffic Services, which is part owned by the UK Government.

“The Government will probably try to exit its ownership of that and when they do the bonds will have to be paid,” Mr Snowden said.

Elsewhere, Baillie Gifford’s Iain McCombie, who topped the Citywire table in January with his Managed Fund, fell back down to sixth place after sliding to position 1,081 in the total list of 3,124 global managers.

Mr McCombie had been able to climb from position 1,049 to 477 in the global table between December and January because the latter figures no longer took account of January 2014, a month in which the fund underperformed its benchmark.

There were two female fund managers in the February table after Kames Capital’s Elaine Morgan, who manages the house’s UK Smaller Companies Fund, entered the ranking at number 20 as a result of climbing to position 2,601 in the global table.

She joined Aberdeen Asset Management’s Fiona Gillespie, who co-manages the group’s Multi-Asset Fund with Michael Turner and was the only woman included on the January list.

In total, five fund managers from Kames made it onto the list.