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BlueBay's Dowding reacts to €2.5bn outflow

BlueBay's Dowding reacts to €2.5bn outflow

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.

The BlueBay Inv Grade Absolute Return Bond fund is co-managed by Mark Dowding (pictured), Raphael Robelin and Geraud Charpin. The trio have been in place since the fund’s launch in 2012.

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.

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