Steady gains for top global fixed income funds
The Money Management / Lonsec finalist and winning funds from this year’s Fund Manager of the Year Awards in the global fixed income sector have continued mostly above-sector returns in the second half of the year, thanks to short-term stratergising.
The fixed income category winning fund, PIMCO Global Bond Wholesale, holds the highest six-month return figures (2.62 per cent) of the group, along with the highest annualised three year returns of the funds compared (5.53 per cent). According to FE Analytics, it also had the highest month-end return of 0.51 per cent, continuing its placement in the top quartile.
Commenting on the funds’ performance, PIMCO head of global portfolio management Sachin Gupta told Money Management that the fund had a strong 6-12-month horizon strategy.
“The fund has and continues to aim to diversify sources of active risk across a range of risk factors so as not to over-concentrate client assets into specific market risks. This has allowed the fund to successfully navigate around potential areas of volatility and offer a truly diversified source of return for investors,” he said.
“We have focused the portfolio in looking for yield opportunities that we think are achievable at minimal to no extra risk for investors. This has been in the form of relative value opportunities we see in certain bond markets across the globe, as well as attractive credit opportunities that have allowed the fund to secure a favourable yield.”
Perhaps the most volatile of the three returns-wise, the Legg Mason Brandywine Global Opportunistic Fixed Income fund still stayed ahead of the benchmark until just recently, and has recorded sixth, three and one month returns of 2.19 per cent, -0.68 per cent and -1.49 per cent in the half year since the awards.
Despite lower returns than the PIMCO fund, the Legg Mason Brandywine Global Opportunistic Fixed Income Fund returns of 2.19 per cent over this six-month period were also ahead of the index and peer median, ranking 12/54 in sector.
“As a truly unconstrained fund, the portfolio is expected to exhibit higher volatility versus the index – especially when measured over the short term - compared to more traditional benchmark relative funds,” said Legg Mason Brandywine in a comment.
“The key contributors to this outperformance were short exposures to the Japanese yen and US dollar, long exposures to the Polish zloty and Polish sovereign bonds along with a long exposure to the Swedish krona.
The final fixed income category nominee fund this year, the Colchester Global Government Bond, had six month returns of 1.00 per cent, rising to a third quartile three-month average return of 0.85 per cent, slightly behind the 0.89 per cent return of the benchmark for that period.
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