Advisor Insight

The key to our success: 5-star bond fund manager

$472 billion of bond advice
$472 billion of bond advice

Making the right investments and interest rate predictions were the key to a successful 2014 for the Morningstar five-star rated Western Asset Core Bond Plus Fund, it's manager told CNBC, and he's looking at more of the same for 2015.

"What's worked for us well this year has been owning many of these spread sectors, or non-Treasury sectors, that have performed quite well this year," Mark Lindbloom said in an interview on Monday with "Power Lunch."

And while many investors at the beginning of the year thought interest rates would be higher by year-end, Western Asset was "more positive that rates would come down."

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The firm also favored 20- and 30-year Treasurys over shorter-term bonds.

"Long rates have fallen much, much more than short rates," he said.

Lindbloom expects the Federal Reserve to begin raising interest rates sometime next year as the economy continues to recover. He's anticipating a growth rate of 2 to 3 percent.

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That would then give a small lift to Treasury rates.

However, he hasn't changed his positions all that much in case that he is wrong in terms of growth or Fed expectations.

"It's not a high probability scenario but we want to have diversified, balanced portfolios and one of the best diversifiers for us are still long-term Treasurys and we continue to hold them in our portfolios."