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Three frontrunners in global bonds revealed

Citywire Investment Research shines a light on the standout stars in the sector.

Market Overview

Global bonds as an asset class has 217 managers with a rating this month: 6 are AAA rated, 44 are AA rated, 64 are A rated and 103 hold a Citywire + rating.

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Comeback Star

Fund Manager: Douglas Peebles, AllianceBernstein
Rating: A-rated

Overview

Making his way back into the ratings this month is veteran investor Douglas Peebles, who has earned an A rating, with his last A rating coming in September 2015. One of the main contributors to his performance in this sector is the AB SICAV I-Global Plus Fixed Income Pf I2 USD, which he has been managing since July 2006. He co-manages this fund with Daniel Loughney, Scott DiMaggio and John Taylor.

Peebles has benefitted from the fund’s long position in the Mexican peso and its sector allocation with its valuable exposure to US high-yield corporates. In terms of securities their decisions were equally positive, as profits from their eurozone corporates & treasuries outweighed losses from their selections in US commercial mortgage-backed securities.

Geographical allocation was also a strength for the fund as they gained from exposure to Brazil, being overweight the UK and underweight in Japan. The fund’s top holding is US treasuries with 2.7% of the portfolio allocated to this position. In terms of sector, it has 46% of its assets invested in global government bonds, and 21% in investment grade corporate bonds. This is while 40% of the portfolio is exposed to the US, and 7.6% is exposed to Japan and 6.4% invested in the UK.

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One to Watch

Fund Manager: Urs Ramseier, Bank J. Safra Sarasin
Rating: AA-rated

Overview

Urs Ramseier is one to watch this month, having achieved his fifth successive AA rating. Ramseier is no stranger to the upper rungs of Citywire’s ratings, having achieved a AAA rating seven times and a AA rating nine times over the last three years.

Ramseier returned 8.7% over a three-year period compared to the average manager’s 5.5% loss, which was on the JSS Insurance Bond Fund P EUR-acc, which he has managed since September 2011. On the fund, apart from its insurance remit, Ramseier invests at least 75% of assets in securities whose issuers make a positive contribution to sustainable development.

Ramseier’s largest bet is on Aegon NV, a multinational life insurance, pensions and asset management company in the Netherlands, with 8% of the portfolio allocated to the company. A sizeable chunk of the portfolio is below investment grade with 30.4% allocated to BBB- rated bonds.

This month’s commentary revealed that Ramseier added exposure to South Africa, trimmed a position in Swiss Re – a leading global reinsurer – and invested this cash into companies such as Old Mutual, a multinational banking, insurance and savings group.

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Rising Star

Fund Manager: Oliver Gasser, Credit Suisse
Rating: AA-rated

Overview

Oliver Gasser of Credit Suisse is our rising star this month, having achieved a AA-rating for April. The fund contributing to his strong performance is the CS (Lux) Global Value Bond Fund EB USD, which he has run since its inception in April 2009.

Gasser has returned 7.4% over the three-year time period compared to the average manager’s 5.5% loss in global bonds. His recent outperformance is powered by his credit-overweight positions, in particular Volkswagen perpetual bonds, where strong performance from the German automaker protected against poor performance from credit hedges on CDS indices.

In his latest performance update, Gasser said the main positive contributor in terms of sector has been Investment grade corporate bonds, which comprise 35.1% of the portfolio. Meanwhile, 22% of the fund is invested in the US, while 15.2% is invested in Switzerland and 7.6% in Germany.

Looking ahead, Gasser is seeking opportunities in credits, particularly in the financial, US high yield, Latin America & Eastern European sectors. He remains sceptical about long-dated government and rate-sensitive sectors around the world but especially in Europe, given political risk and ECB tapering talk.

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Related Fund Managers

Douglas Peebles
Douglas Peebles
30/474 in Bonds - Global (Performance over 3 years) Average Total Return: 10.10%
Oliver Gasser
Oliver Gasser
62/474 in Bonds - Global (Performance over 3 years) Average Total Return: 6.95%
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