The frustrations faced by fixed income investors are well-documented, with yields being kept near zero and, in some cases, plummeting into negative territory.
This has given rise to alternative means of tapping the bond market and an increasing number of Alternative Ucits funds focused on fixed income have come to light.
There are currently 78 funds followed by Citywire in the Alternative Ucits – Bond Strategy sector which can boast at least 12 months of track record.
But the numbers are not illuminating. The average manager in the sector lost 2% in euro terms over the year to the end of January 2016. This is while only 15 of the 78 funds ended the period in positive territory.
The top five funds all ended with a 2% return or greater, but there is one fund which went above and beyond and outperformed its nearest rival by a relatively significant margin. So, who is leading the pack and battling ahead in bonds?
|Fund Manager||Contributing Fund||One Year TR|
|Not disclosed||Alegra Credit Fund -EUR-||6.3%|
|Tad Rivelle/Stephen M. Kane/Laird R. Landmann/Bryan T. Whalen||TCW Funds MetWest Unconstrained Bond Fund IE -YD||4.4%|
|Jonathan Xiong/ Iain Lindsay / Angus Bell||Goldman Sachs Glo Strat Macro Bond Pf E Acc EUR-H||3.9%|
|Nishant Upadhyay||HSBC GIF GEM Debt Total Return M1C USD||2.8%|
|Matthias Bruckmeir/Peter Oellers||LBBW Pro-Fund Credit I||2%|
Alegra Credit – EUR
One year return (January 2015-January 2016): 6.34%
The Liechtenstein-domiciled Alegra Credit fund has posted the strongest outperformance over this period. This strategy, which is one of four bond funds operated by the independent asset manager, was launched in February 2014.
The Alegra Credit fund has a dedicated focus on the asset-backed securities market, while also prioritising the use of low volatility market approaches. It seeks to capitalise on ABS issued by special purpose vehicles, with assets drawn from loans, bonds, mortgages and similar structures.
Tarun Buxani, who joined the firm in January 2015, is the only named portfolio manager at the firm. He was previously with Pramerica Financial, where he had overseen more than €2 billion in high yield bond and leverage loan portfolios.
This included tenures on the European Dryden CLOs, which were two CLO vehicles, as well as being a named manager on the Pramerica European High Yield fund.