Short-term investors tend to benefit from volatile markets, so with the difficulties of both 2008 and 2011 how have those with a shorter time horizon fared over the past five years?
Citywire Global has taken a close look at the performance of bond managers focusing on short-term investment ideas.
There are currently 92 fund managers with a five-year track record in the European short-term bond sector in the Citywire database. Out of these, three of outperformed the average manager in each of the past five years.
This trio is entirely different from the three managers who were last showcased for their consistent performance when we analysed the European short-term bond sector in November 2012.
So who has posted strong, consistent performance and how have they done it?
Jonny Sundström, Alandsbanken
Fund: Alandsbanken Euro Bond B
Best year of performance vs. average manager: +6.58% in 2009/10
One of the longest serving managers on this list is Jonny Sundström of Finnish company Alandsbanken. He has overseen the group’s European short-term bond fund since it was launched in October 1998.
Sundström focuses the fund on bonds from the financial sector, which make up 40% of the fund at the end of July 2013. This is while having 14% of the fund in industrials, 10% in covered bonds and 8.5% in basic industries.
In the most recent fund update, Sundström said he is positioning the fund to weather potential movements in global interest rates towards the end of 2014, although he does not expect any seriously disruptive rate rises.
Tatjana Greil Castro, Muzinich & Co.
Best year of performance vs. average manager: +7.62% in 2008/09
Posting the strongest outperformance of the three consistent managers is Muzinich & Co.’s Tatjana Greil Castro. Greil Castro has been lead manager on the Dublin-domiciled fund since May 2007.
Recent outperformance, Greil Casto said, has been drawn from her small allocation to high-yield bonds, while holdings in automotive and auto parts companies as well as the services sector have also contributed positively.
According to the most recent factsheet, Greil Castro had 22% of the fund invest in bonds rated BBB2 and 20% in BBB3. These bond ratings represent an amalgamation of those issued by Moody’s, Fitch and S&P.
Marie-Suzanne Mazelier, Amundi
Fund: SG Oblig Corporate 1-3 I
Best year of performance vs. average manager: +4.40% in 2008/09
The third of our three outperformers is Amundi manager Marie-Suzanne Mazelier, who continues to run the SG Oblig Corporate 1-3 I fund on behalf of her former employers Société Générale.
Mazelier was named as lead manager on the fund in 2006 and has continued at the helm of the strategy despite joining Amundi in 2010.
In the €948 million fund, Mazelier has an overweight to BBB-rated bonds, while investing largely in bonds from the automotive, consumer goods and services sectors.
Despite the strong returns in each of the past five years, Mazelier had the narrowest period of outperformance over the analysis period. Between July 2012 and July 2013, Mazelier beat the average manager by 0.2 percentage points.