Five global bond funds for investors turning conservative
Global institutional investors are looking to mitigate risks amid concerns about a downturn in the economic cycle, according to BlackRock’s annual survey of global institutions, prompting Money Management to single out some global bond funds that have performed well over the last three years.
Over half of respondents (56 per cent) stated that the possibility of the cycle turning was one of the most important macros risks influencing their rebalancing and asset allocation plans, and over half (51 per cent) also intended to decrease their allocation to public equities.
Edwin Conway, global head of BlackRock’s institutional client business, said as the economic cycle turns, private markets could help clients navigate the more challenging environment.
“We have been emphasizing the potential of alternatives to boost returns and improve diversification for some time, so we’re not surprised to see clients increasing allocations to illiquid assets, including private credit,” he said.
Almost a third (29 per cent) of respondents intended to increase allocations to fixed income last year, and 38 per cent intend to do so this year.
Data from FE Analytics shows Invesco’s Senior Secured Loans fund took out the top spot for the three years to 30 November 2018, with returns of 5.88 per cent as compared to the global bonds sector average of 2.87 per cent and its benchmark, the Bloomberg AusBond Bank Bill index, which returned 1.93 per cent.
The four FE Crown-rated Supervised Global Income fund sits a close second with returns of 5.80 per cent for the same period, and PIMCO’s Income Wholesale fund and Emerging Markets Bond fund follow with returns of 4.91 per cent and 4.75 per cent respectively.
The three FE Crown-rated Russell Global Bond fund returned 4.50 per cent for the same period, also outperforming its benchmark, the Bloomberg Barclays Global Aggregate index, which returned 1.93 per cent.
The chart below tracks the performance of the funds from 30 November 2015 to 30 November 2018 as compared to the Bloomberg AusBond Bank Bill index.
Recommended for you
In the latest Meet the Manager profile, Money Management speaks with Michael Skinner, founder and managing director at Blackwattle Investment Partners.
Perpetual has seen AUM rise 6 per cent in the last quarter but the departure of a longstanding JOHCM fund manager led to outflows of $2.2 billion from his strategy.
Global fixed income fund Bentham Global Opportunities has been added to several major platforms, enabling it to be accessed more easily by financial advisers.
Following yesterday’s news about First Sentier Investors closing four investment teams, a second global asset manager has announced it is closing its only dedicated Australian fund.
