BlueBay Asset Management believes appetite for absolute return funds will rebound despite its investment grade-focused fund dropping €2.55 billion in the past year.
Over the period from May 2015 to June 2016, which is the latest available Lipper data, the fund has dropped from a peak of €5.68 billion in assets under management to €3.13 billion.
The fund has lost 6.5% in euro terms over the 12 months to the end of May 2016, which compares with a fall of 2.1% by the average manager in the Absolute Return EUR sector over the same analysis period.
Speaking to Citywire Selector, Dowding, who is co-head of investment grade debt and named on several other bond funds, said the decline could be linked to two main reasons.
‘Outflows have been partly a function of institutional clients moving assets from our commingled fund into segregated mandates. However, we are also aware, that during a period when fixed income yields have fallen sharply, absolute return strategies have lagged benchmarked funds.’
Dowding said this decline in assets is unlikely to be sustained, however, given the ultra-low levels yields have now fallen to.
The BlueBay Investment Grade Absolute Return Bond fund fell 3.2% in euro terms over the three years to the end of May 2016. This is while the average manager in the Absolute Return EUR sector returned 2.7% over the same timeframe.