European companies have had a tumultuous time over the past five years but two stand-out managers have kept themselves ahead of their peers during this period.
In the Lipper Global Bond EUR Corporates sector, there are currently 178 managers followed by Citywire, with 80 of these boasting a five-year track record.
From this fund manager line-up, two credit specialists have consistently outperformed the average manager in the sector over the past five years.
The most commonly held benchmark, the FTSE Euro Corporate Bond TR, rose 36.67% in the five years to the end of July 2013. This is while the average manager returned 28.76%.
So who are the two managers to have gone above and beyond their counterparts over this period?
David Stanley, T Rowe Price
Five year total return (July 2008-July 2013): 42.91%
Best performance vs. average manager: +3.88% in 2009/10
T Rowe Price’s David Stanley is one of the two leading lights in corporate bonds over the past five years. He has run the corporate bond fund since launch in December 2003.
He was previously supported on the Luxembourg-domiciled fund by Ian Kelson, who served in an advisory role up until April 2010.
On this strategy, the Euro Stars AAA-rated manager has his greatest allocation to the UK market (19.4%), while banks make up eight of the top 10 positions in the fund at the end of August 2013.
Stanley favours BBB-rated bonds at present, which make up 54% of the fund’s allocation by credit quality. This is compared to a 42% allocation in the fund’s benchmark.
Mikael Lundström, Evli
Fund: Evli Yritslaina B
Five year total return (July 2008-July 2013): 41.43%
Best performance vs. average manager: +3.59% in 2008/09
Rivalling Stanley for the consistency crown is Mikael Lundström, who runs two bond funds on behalf of Finnish investment firm Evli. He has been lead manager on the group’s European corporate bond fund since its launch in September 1999.
Lundström, like Stanley, has a strong allocation to BBB-rated bonds, which make up 36% of the fund at present, while also favouring banks on a sector basis.
At present in the €236 million fund, Lundström holds Finnish financial company Sampo as his biggest bond position.