Almost all (92%) of ‘sustainable/ethically’ labelled global fixed income funds have made a return so far this year, compared to 73% of standard global fixed income funds according to data.
According to FE Analytics, within the Australian Core Strategies universe, there were 13 ‘sustainable/ethical’ global fixed income funds, with the top-performing fund being Pendal Sustainable International Fixed Interest with a return of 5.48% since the start of 2020 to 31 August, 2020.
The Pendal fund also came in at sixth when considering all 112 global fixed interest bond funds. The global fixed income average sector return was at 2.72%.
Dimensional Global Bond Sustainability Trust followed at 5.13%, PIMCO ESG Global Bond Wholesale at 4.24%, Vanguard Ethically Conscious Global Aggregate Bond Index Hedged AUD at 4.08%.
The only fund that lost money was Vanguard Ethically Conscious Global Aggregate Bond Index Hedged NZD with a loss of 1%.
The latest factsheet for the Pendal fund said in August the relative value strategy performed well, with the cross-market, duration, FX, and macro strategies detracted.
“The relative value strategy was the best performer over the month. All gains were from the long real yields positions in the US. The position suffered some drawdown within the month but fully recovered towards the end of the month,” it said.
“The macro strategy was the largest detractor over the month. Most losses were from the long gold position. While we still believe in the long in gold (real yield trade), the market fluctuations had made the position unprofitable.”
Pendal said predicting when a COVID-19 vaccine would be available and how effective it would be was difficult but governments were reminding investors extraordinary support would remain in place long after economies rebounded.
“Near term this depresses bond yields but also lifts equities, a great result for investors. Medium term if inflation were to pick up pressure may come on term bond markets, challenging this consensus,” it said.
Top performing sustainable/ethical global fixed income funds since start of 2020 to 31 August 2020
Source: FE Analytics
Out of the 99 global fixed interest bond funds, 29 failed to make a return.
The top-performing global fixed interest bond fund was Legg Mason Brandywine Global Income Optimiser X at 11.06%.
This was followed by Legg Mason Brandywine Global Income Optimiser A (10.66%), Lazard Emerging Markets Total Return Debt (9.28%), Ardea Diversified Bond (8.04%), and Ardea Diversified Bond F (6.43%).
Top-performing global fixed income funds since start of 2020 to 31 August 2020
Source: FE Analytics
On the other end of the scale, SPW Global Income had the largest losses at 21.03%, followed by Colchester Emerging Markets Bond I (-9.96%), Mercer Emerging Markets Debt (-9.48%), Franklin Templeton Multisector Bond W (-7.83%), and Templeton Global Bond Plus W (-7.73%).
