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Four European bond managers to watch

Citywire Investment Research uncovers a quartet posting ratings worthy performances this month.

Market overview

There are 150 managers that have received ratings within the European bonds asset class this month. Out this there are a total of 5 AAA rated managers, 26 AA, 28 A and 91 who are now Citywire + rated.

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Highest New Entrant

Fund Manager: Ismael Lecanu, AXA Investment Managers

Rating: + rated in Bonds - Euro

Overview

AXA IM's Ismael Lecanu entered our ratings this month as one of the highest new entrants in European bonds with a Citywire + rating.

Over the last three years, Lecanu returned 10.8%, while the average manager in the Bonds – Euro sector returned 5.2% in EUR terms. The fund that is currently contributing to his positive risk-adjusted performance is the AXA WF Euro Credit Total Return A C EUR fund, which he has run since March 2015. The AXA IM Euro Credit Bonds fund is also a contributor to his performance as he managed it from December 2011 to May 2015.

Lecanu has an overweight position in subordinated debt, hybrid and high yield bonds, while the financial subordinated and corporate hybrids exposure was increased from 35% to 41% relative to the fund’s allocations. Some of the amplified exposures are the Caixa Additionnal Tier 1 subordinated issue by the Portuguese-stated owned bank Caixa Geral de Depositos and the high yield bonds from Swiss credit management services group Intrum Justitia.

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Comeback Star

Comeback Star: Giuliano Flematti, Banca del Sempione SA

Rating: + rated in Bonds - Euro

Overview

The comeback star this month is Citywire + rated Giuliano Flematti, who was last rated 20 months ago in October 2015. He has run the Base Investments Bonds Value EUR Dis fund since November 2008.

Flematti currently sits top of the three-year total return ranking table among a peer group of 258 managers, having significantly outperformed the average manager by with a return of 26% in euro terms.

The Base Investments Bonds Value EUR Dis sub-fund invests in all types of bonds with minimum rating of BBB- . The £183 million fund has been catching the eye of investors recently as it saw an inflow of £46 million during the first half of this year alone. The Ucits fund is currently registered for sale in Switzerland, Luxembourg, Italy and Bulgaria.

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Rising Star

Fund Manager: Paul Gagey, Aviva Investors

Rating: AA-rated in Bonds - Euro

Overview

Moving up the ratings this month is Paul Gagey, who has risen from a Citywire A rating to AA-rated this month. His performance is drawn from the Aviva Rendement Europe fund, which has been under his management since October 2006.

In five year numbers, Gagey has returned 49.5% while the average manager in the Bonds – Euro sector returned 19.2% in euro terms over the same time period.

Gagey is currently viewing the whole market as expensive but has seen the opportunity to strengthen current positions in Belgium multinational insurance company Ageas, which makes up 2.2% of the fund's exposure. The company has its activities centred on Europe and Asia with its UK segment being among the key contributors to the company’s targets. Ageas currently holds the A rating with a stable outlook by S&P and Fitch.

In terms of region, Gagey only has 14% exposed to the UK and is currently 6.9% underweight against the index. On the other hand, France is among the largest bets, making up 27.3% of his allocation, which is an overweight of 6.8 percentage points compared to the index.

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One to Watch

Fund Manager: Lyndon Man, Invesco

Rating: AA rated in Bonds - Europe

Overview

The manager to watch this month is AA-rated Lyndon Man, who has been consistently rated AA by Citywire since becoming eligible in August 2016. He has returned 14.1% over the past three years, while the average manager in Bonds – Europe delivered a return of 6.8% in euro terms.

The contributor to his performance in the sector was the Invesco Euro Bond A Acc EUR fund which is also managed by Luke Greenwood.

The duo's largest regional investment is the UK, which accounts for 14.7% of exposure and is a 12.4 percentage point overweight against the fund manager benchmark. The fund is considerably underweight France, which accounts for 13.5% of the managers bets while making up 22.4% of the benchmark’s portfolio.

The pair have a relative value preference for Ireland and Spain over Portugal and Italy. The managers also highlighted their preference for BBB-rated bonds and financials which make up most of the portfolio.

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Related Fund Managers

Lyndon Man
Lyndon Man
399/593 in Bonds - Global (Performance over 1 year) Average Total Return: 2.57%
Luke Greenwood
Luke Greenwood
61/118 in Bonds - Europe (Performance over 1 year) Average Total Return: 2.06%
Ismael Lecanu
Ismael Lecanu
24/260 in Bonds - Euro (Performance over 3 years) Average Total Return: 11.71%
Giuliano Flematti
Giuliano Flematti
5/260 in Bonds - Euro (Performance over 3 years) Average Total Return: 23.26%
Paul Gagey
Paul Gagey
8/260 in Bonds - Euro (Performance over 3 years) Average Total Return: 18.54%
Events
  • Citywire Alternative Ucits Retreat 2017

    Citywire Alternative Ucits Retreat 2017

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