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The most consistent global bond managers revealed

Citywire Selector uncovers the six investors able to stay ahead in challenging markets.

Guiding lights in global bonds

Ask any fixed income fund investor and they’ll tell you 2017 has been tough. Low – and even negative – yields coupled with a rising rates environment has created an odd market in which to operate and, for selectors, finding someone able to consistently outperform has been a challenge.

Citywire Selector has delved into the data to discover which global bond managers are the best to back over the longer term. Looking at how they have fared against the average manager in each discrete 12-month period between October 2012 and October 2017, there are six managers who can hold their heads high. Let’s take a closer look.

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Burkhard Allgeier, Hauck & Aufhäuser

Fund: H & A Renten Global B

Five-year total return (October 2012-October 2017): 11.49%

Best year of outperformance vs. average: +3.99% in 2012/13

Citywire + rated Burkhard Allgeier has overseen the H & A Renten Global fund since 2009. He has produced solid outperformance over the past five years and sits 31st out of the 292-storng peer group on an absolute basis.

In his €76 million fund, Allgeier has nearly 20% exposed to the US market but operates on a broadly diversified basis, with 46% invested in unnamed countries away from the larger markets. He also favours unrated bonds, with 42% allocated to securities with no defined rating at present.

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Moz Afzal & Michael Leithead, EFG AM

Fund: New Capital Global Value Credit USD Ord Acc

Five-year total return (October 2012-October 2017): 18.58%

Best year of outperformance vs. average: +5.43% in 2013/14

Producing better absolute numbers but with the same consistent outperformance are EFG AM duo Michael Leithead and Moz Afzal, with the latter the CIO of the group. Afzal has overseen the Dublin-domiciled New Capital Global Value Credit fund since 2003, while Leithead was added in 2007.

The pair have a strong focus on financials, with almost two-fifths of the fund invested in bonds from this sector. This is well ahead of energy and government debt, which represent around 12% each. They favour corporate debt and have nearly 60% invested in bonds of this type, while Europe is their preferred hunting ground.

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Bob Michele & Nick Gartside, JPM AM

Fund: JPM Global Bond Opportunities A Acc USD

Five-year total return (October 2012-October 2017): 21.21%

Best year of outperformance vs. average: +7.36% in 2014/15

Featured here are two of three managers overseeing the $2.37 billion JPM Global Bond Opportunities fund. Veterans Bob Michele and Nick Gartside feature, but Citywire + rated Iain Stealey does not, as he runs different funds in the global bonds sector, which impacts his performance in the consistency rankings.

The trio operate with a strong focus on riskier parts of the debt market, with 36% allocated to corporate high yield and 21% in emerging market debt. This is with more than 50% of the total assets invested in bonds with a credit rating of BBB or lower. They hold 1514 holdings at present and have 44.5% exposed to the US market.

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George Lentzakis, Eurobank AM

Fund: (LF) FOF Dynamic Fixed Income Eurobank I

Five-year total return (October 2012-October 2017): 10.21%

Best year of outperformance vs. average: +4.39% in 2012/13

Despite posting the lowest absolute numbers, Eurobank AM’s George Lentzakis can hold his head high as one of the six managers to have consistently beaten the average peer over the past five years.

He is recognised here for his work on the Greek group’s dynamic fixed income fund, while his co-manager, Theodore Deirmentzoglou, lacks the necessary track record to be included.

In this fund, which was launched as a Luxembourg-domiciled vehicle in 2012, the main focus is on running a diverse book of bonds, which can include derivatives where the managers see fit. They currently have nearly 70% invested in corporate and high yield bonds, with the remainder in government debt.

Lentzakis also has the narrowest period of outperformance from any of the managers featured. In 2014/15, he lost 6.13% while the average manager lost 6.17%, meaning he had a 0.04 percentage point margin of outperformance for the 12-month period.

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Related Fund Managers

George Lentzakis
George Lentzakis
84/417 in Bonds - Global (Performance over 3 years) Average Total Return: 8.18%
Theodore Deirmentzoglou
Theodore Deirmentzoglou
83/417 in Bonds - Global (Performance over 3 years) Average Total Return: 8.18%
Iain Stealey
Iain Stealey
122/417 in Bonds - Global (Performance over 3 years) Average Total Return: 6.70%
Nick Gartside
Nick Gartside
29/417 in Bonds - Global (Performance over 3 years) Average Total Return: 12.65%
Bob Michele
Bob Michele
30/417 in Bonds - Global (Performance over 3 years) Average Total Return: 12.65%
Moz Afzal
Moz Afzal
51/417 in Bonds - Global (Performance over 3 years) Average Total Return: 10.74%
Michael Leithead
Michael Leithead
52/417 in Bonds - Global (Performance over 3 years) Average Total Return: 10.74%
Burkhard Allgeier
Burkhard Allgeier
141/417 in Bonds - Global (Performance over 3 years) Average Total Return: 6.21%
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