Citywire - For Professional Investors

Register to get unlimited access to all of Citywire’s fund manager database. Registration is free and only takes a minute.

Best US dollar bond managers to face Fed volatility

Best US dollar bond managers to face Fed volatility

The first rate hike in nearly a decade has finally hit the markets and US bond managers will be facing volatility in the period ahead.

They have worked with the strengthening US dollar and a strong US economic recovery over 2015, and as they enter a new area of tightening which managers will be able to handle the changes?

From a field of 97 managers running US dollar-denominated funds, with the average manager returning of 0.9%, Citywire Americas has uncovered the top three managers  that best rode the period of volatility following the 'Taper Tantrum' of 2013 after former Fed chairman Ben Bernanke's QE tapering announcement.

3. Michael Pfeiffer – KEPLER FONDS

Fund: KEPLER Dollar Rentenfonds

Total returns June 2013 – November 2015: 6.7%

Kicking off our top three ranking is Citywire A-rated Pfeiffer, bond manager at Austrian fund house KEPLER FONDS.

His fund beat its Barclays US Aggregate Bond benchmark over the analysis period which rose 5.7%.

As of end of November, his top holding was KBC IFIMA, a wholly owned subsidiary of KBC Bank. The US makes up his largest country allocation at 17.3%, followed by Holland (10.7%) and the UK (9.2%).   

His Ucits fund is domiciled in Austria and invests in US dollar-denominated debt issued by countries and corporations from around the world.

2. Dirk Schmelzer & David Strasser

Fund: Plenum CAT Bond Fund  

Total returns June 2013- November 2015: 7.5%

In second place are Citywire AA-rated Dirk Schmelzer and David Strasse from Swiss asset management firm Plenum Investments.  

The fund invests in catastrophe bonds with a focus on dangerous winds and earthquakes in developed regions such as southeastern US, Western Europe or Japan. In its latest factsheet, the managers explained that weather phenomenon El Nino, which brings warmer temperatures and an increase in precipitation to the US, should not concern catastrophe bond investors since damage has not been seen in capital markets even though they cause large insurance losses each year.

They also expect that as Europe enters its storm season to see gains on corresponding bonds.

1. Anthony Smouha – GAM

Fund: GAM Star Credit Opportunities

Total returns June 2013- November 2015: 18.9%

Topping our ranking of best performing US dollar bonds manager is Citywire AAA-rated Smouha, a regular leading performer in this sector. His $1.2 billion fund focuses predominantly on high yield bonds issued in US dollars with also a 30% allocation to BBB-rated paper.

In his latest commentary, Smouha acknowledged that Fed Chair Janet Yellen’s hints of a rake hike in December gave the fund a boost. He also said financial holdings were looking healthy as companies are strengthen their capital in line with regulatory pressures and new issues are hitting the market with very attractive spreads. The fund participated in new issuances from Swiss Re in November.

He comfortably outperformed its benchmark, the BofA Merrill Lynch US High Yield BB-B Rated, more than tripling its rise of 5.6% over the analysis period.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Events
  • Citywire Latin America 2017

    Citywire Latin America 2017

  • Citywire Miami 2017

    Citywire Miami 2017

  • Citywire Santiago 2017

    Citywire Santiago 2017

  • Citywire Mexico 2017

    Citywire Mexico 2017

  • Citywire Miami 2017

    Citywire Miami 2017

  • Citywire New York 2016

    Citywire New York 2016

  • Citywire New York 2016

    Citywire New York 2016

  • Citywire Mexico 2016

    Citywire Mexico 2016

  • Citywire Mexico 2016

    Citywire Mexico 2016

  • Citywire Panama 2016

    Citywire Panama 2016

  • Citywire Latin America 2016

    Citywire Latin America 2016

  • Citywire Latin America 2016

    Citywire Latin America 2016

  • Citywire Miami 2016

    Citywire Miami 2016

  • Citywire Miami 2016

    Citywire Miami 2016

  • Citywire Panama 2016

    Citywire Panama 2016

  • Citywire New York 2015

    Citywire New York 2015

  • Citywire New York 2015

    Citywire New York 2015

  • Citywire New York 2015

    Citywire New York 2015