Our latest Citywire 1000 analysis reveals the top performers in the eurozone bonds sector based on their risk-adjusted performance and ability to generate positive returns.
The analysis is calculated across 98 sectors over three years to 30 June 2012.
1. Fund manager: Chris Bullock
Fund: Henderson HF Euro Corporate
The best performing eurzone bond manager - and in the Citywire 1000 overall ranking - is Chris Bullock (below) of Henderson who manages Henderson HF Euro Corporate Bond. The €1 billion portfolio has nearly doubled the index return since launch in December 2009 posting gains of 23.3% versus 12.7% for the Markit iBoxx Euro Corporates.
The fund has a bias to companies based in core Europe and its financials exposure has been selective, with a preference for investing in banks that have solid capital positions backed by stronger sovereigns.
The majority of the portfolio is exposed to investment-grade bonds (82%), with a focus on A-rated (31%) and BBB-rated (30%) corporate debt. There is also around 8% held in high yield and views on individual companies are also taken through the use of credit default swaps.
Bullock co-manages the fund with Stephen Thariyan who is head of credit and has himself achieved a top ten position in the Citywire 1000.
2. Fund manager: Rikke Secher
Bond manager for the Danish group Danske, Sikke has come second in this eurozone bond ranking and has achieved seventh place in overall Citywire 1000 analysis for her strong risk adjusted performance across both funds.
The European Bond fund invests in the euro-denominated investment grade bonds and is benchmarked against the Barclays Euro Aggregate index. Secher is overweight corporate bonds at the expense of sovereigns, but is backing Finnish government bonds which are the portfolio’s top holdings.
Danske Invest Europaeiske Obligationer has a wider remit investing in European bonds and up to 25% is held outside European currencies where exposure is hedged.
Over three years Secher has managed to more than double the index with returns of 27.1% versus 11.2% for the Barclays Euro Aggregate 500 Mio+ 1-5 Yr index.
The portfolio’s largest holding is in French government bonds maturing in 2018 and she favours banks include DnB NOR, Abn Amro and Danske Bank.
3. Fund manager: Erich Hackl
In third place and in 21st place in the Citywire 1000 raking, Hackl invests in eurozone sovereigns and also has some exposure to euro-denominated bank bond.
Despite the sector’s volatility in recent times and the challenges faced, Hackl has returned 18.8% compared with 11.4% for the Citigroup EMU GBI index.
4. Fund manager: Bernhard Urech
Fund: Julius Baer BF Euro
Rounding off our eurozone bond ranking is Bernhard Urech who also currently stands in 23rd position in the Citywire 1000 rankings.
The Swiss & Global Asset Management manager runs the fund alongside with Mario Fraefel. They predominantly invest in euro-denominated government and corporate bonds and the portfolio’s current highest allocation is to BBB paper.
Urech believes solid balance sheets and high free cash flow gives investment grade bonds an attractive risk-return profile and his overweight to corporates has helped drive returns.
An underweight to peripheral countries has also helped generate outperformance. The fund has returned 17.1% since Urech became co-manager in September 2009 against 11.1% for the Custom Benchmark JB BF Euro.
To find out more about Citywire 1000 and to order a copy visit www.citywire1000.com
Performance in this article has been calculated in euros to 30 June 2012.