Against the backdrop of an uncertain rates environment, a large number of bond investors have moved into shorter-dated debt, but which managers have fared best?
Citywire Global currently tracks 175 managers in the Bond – Euro Short Term sector.
Of this pool of talent, there are 101 who can attest to a five-year track record. Out of these managers, the average returned 11.9% in absolute terms over this period.
While absolute outperformance is always noteworthy, only three managers have consistently beaten the average return in each individual year between July 2009 and July 2014.
Let’s take a closer look at the three fund managers producing solid performances and find out what is currently driving their investment approaches.
Tatjana Greil Castro, Muzinich & Co.
Five year total return (July 2009-July 2014): 27.68%
Best period of outperformance vs. average manager: +6.49 in 2009/10
The first of our three outperformers is Tatjana Greil Castro of fixed income specialists Muzinich & Co. She makes her second appearance in this analysis, having been one of three outperformers when Citywire Global last carried out a similar study in August of last year.
Greil Castro has 14% of the fund currently invested in financials, while 13% is exposed to telecoms and 10% is in automotive and auto parts. On a credit quality basis, the largest exposure is to BBB2-rated bonds, which make up 25% of the fund.
Jonny Sundstrom, Alandsbanken
Fund: Alandsbanken Euro Bond B
Five year total return (July 2009-July 2014): 28.52%
Best period of outperformance vs. average manager: +6.45 in 2009/10
As with Greil-Castro, Alandsbanken’s Jonny Sundstrom also featured last time this analysis was undertaken. He has retained this outperformance over the intervening year and also posted strong absolute returns.
The Citywire AA-rated manager also has financials as his biggest sector bet. However, he has a far larger exposure than Greil Casto, as he has around 48% invested in this sector. Industrials make up the second largest investment at 14%.
Lucile Combe, Cogefi
Fund: Cogefi Rendement P
Five year total return (July 2009-July 2014): 29.85%
Best period of outperformance vs. average manager: +6.09 in 2009/10
Joining the two repeat performers is relative newcomer Lucile Combe of French asset management group Cogefi. The Citywire + rated manager has run the France-domiciled fund since April 2008.
Combe has a strong home bias in the fund, investing at least half of its assets into the French market. The emphasis is largely on high yield debt, which makes up nearly 50% of total exposure, ahead of 26% in non-rated bonds and 18.9% in investment grade.
Out of the three managers, Combe came closest to not outperforming the average manager during this period. In the year July 2011-July 2012, she beat the average peer by only 0.09 percentage points.