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Four outperforming Euro bond managers to watch

Citywire Investment Research unearths a quartet of managers posting ratings worthy performance this month.

Market Overview

European bonds as an asset class has 137 managers with a rating this month. Within that six are AAA rated, 20 are AA rated, 38 are A rated and 73 have a Citywire + rating.

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Highest New Entrant

Fund Manager: Mariann Stoltenberg Lind, ODIN Forvaltning

Rating: + Rated

Overview

ODIN's Mariann Stoltenberg Lind is among this month’s highest new entrants. She has achieved a + rating after an impressive three year performance on the Odin Kreditt C fund. This sits in the European bonds asset class and is co-managed by Nils Hast, who has been managing it since September 2009.

The fund invests primarily in Norwegian and foreign, typically European, corporate bonds. A minimum of 50% of these investments must be in companies with a credit rating of BBB- or higher, and up to 20% of the portfolio can be lower than BB or have no credit rating, allowing her to invest across a broad spectrum of risk.

Relative to her benchmark and in terms of sector, Stoltenberg Lind is largely overweight financials, with 60% assigned there compared to 26% in the benchmark. She is also largely overweight insurance, with 26% of the portfolio allocated compared to 6% in the benchmark. Geographically, she is confident about Norway’s prospects as 20% of the portfolio is allocated to the market, which doesn't appear in her benchmark index.

The fund’s bet on Swedish Education Company YA Holding and French bank Crédit Agricole paid off this month as they were the biggest risers in the fund. This is while investments in banking giant AXA and oil company Pacific Drilling dragged the performance of the portfolio down.

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Comeback Star

Fund Manager: Mauro Valle, Generali Asset Management SGR

Rating: AAA Rated

Overview

Mauro Valle has reclaimed his AAA rating and is our Comeback Star for this month, which follows his excellent performance over a three year period. His last AAA rating was in November 2016. One of his contributing funds is the Generali IS Euro Bond D Cap EUR fund, which sits eighth in the Bonds – Eurozone sector over three years. This fund returned 15.5% compared to the average manager’s 8.5% return over the same period.

Valle is bullish on Italy, with 57% of the fund invested there compared to 24% in its benchmark, showing considerable faith in the recently distressed country. Accordingly, its largest holding is in Italian bonds with 6.4% of the portfolio allocated to one bond maturing in September 2022.

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One to Watch

Fund Manager: Elie Chamma, Sedec Finance

Rating: AA Rated

Overview

Elie Chamma of Sedec Finance is One to Watch this month, as he achieved his third successive AA rating having achieved As from January through to March. Chamma is on an upward trend towards the elusive AAA rating, which he has not managed to achieve entering our ratings in July 2014.

The fund giving him his rating in the Bonds – Euro Medium Term sector is the Sedec UCITS Rendement R EUR fund. This was previously the Sedec Rendement Long Terme, which he started managing in 1995. It focuses on sovereign, corporate, convertible and perpetual bonds. The impressive 21-year track record has not failed to impress recently as he outperformed the average manager by producing a performance of 25.6% compared to their 18.5%.

In his latest monthly commentary, Chamma said French PM Emmanuel Macron had reassured fixed income markets with his liberal economic programme. However, he also noted that the usual suspects of Spain and Portugal saw a fall in bond prices as legislative election news in Italy cast a shadow over their future in the eurozone. Nevertheless, his biggest worry is currently coming from CGG, a French-based geophysical services company, who recently filed for bankruptcy protection.

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Rising Star

Fund Manager: Jean-Paul Cheve, CamGestion

Rating: A Rated

Overview

Rising up the ratings this month is Jean-Paul Cheve of CamGestion, who achieves an A rating for June up from his Citywire + rating from May 2017. Cheve is on his way back to the top after he spent eight months in 2015 being AAA rated.

Over the last three years, Cheve returned 14.3% compared to the average manager’s 7.5%. The fund giving him this remarkable outperformance in the Bonds – Europe sector is the Camgestion Obligations Europe Classic fund.

The fund is divided into 70% government bonds and 30% corporate bonds, indicating Cheve’s confidence in European political stability. He said the threat of deflation is now distant and inflation should gradually rise toward the European Central Bank’s target as the moderate but confirmed recovery continues.

Cheve is largely overweight his home country France, with 35.6% of the fund allocated there, while 22% is invested in Italy. He is maintaining his high modified duration and continuing to favour the 7-10 year segment of the yield curve.

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Related Fund Managers

Mauro Valle
Mauro Valle
9/112 in Bonds - EuroZone (Performance over 3 years) Average Total Return: 12.55%
Mauro Valle
Mauro Valle
9/112 in Bonds - EuroZone (Performance over 3 years) Average Total Return: 12.55%
Mariann Stoltenberg Lind
Mariann Stoltenberg Lind
2/74 in Bonds - Europe (Performance over 3 years) Average Total Return: 18.62%
Mariann Stoltenberg Lind
Mariann Stoltenberg Lind
2/74 in Bonds - Europe (Performance over 3 years) Average Total Return: 18.62%
Jean-Paul Cheve
Jean-Paul Cheve
6/74 in Bonds - Europe (Performance over 3 years) Average Total Return: 11.41%
Elie Chamma
Elie Chamma
4/58 in Bonds - Euro Medium Term (Performance over 3 years) Average Total Return: 9.82%
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