Bond managers will be happy to see the end of 2015, a year that has challenged them with slower global growth, less liquid markets and a minefield of monetary policy decisions.
In this analysis, Citywire Americas reveals the bond managers who best rode out the period of volatility following the 'Taper Tantrum' of 2013, which saw former Fed chairman Ben Bernanke's QE tapering announcement in May 2013.
From a field of about 220 managers running global bond funds, with the average manager losing 0.8%, here are the top three managers with the best total return from the 30 month period since June 2013.
3. Michael Stahel, LGT Capital Partners
Total returns June 2013-November 2015: 10.2%
Citywire AAA-rated Michael Stahel has been managing the fund, which invests in insurance-linked securities also known as CAT bonds, since it was launched in May 2005. The $1.3 billion fund has well outperformed its benchmark Citi WGBI TR USD which fell 3.8% over the same analysis period.
Due to its unique structure and investment strategy, the fund’s risks are aligned to clearly defined disasters such as earthquakes and hurricanes rather than fluctuations in financial markets. According to its latest factsheet published at the end of November the biggest risk facing the fund is a hurricane in southeast US.
2. Paul Causer & Paul Read, Invesco
Total returns June 2013-November 2015: 18.7%
Taking the second spot are the Invesco Perpetual duo Paul Causer and Paul Read who manage the £136.3 million ($204.5 million), UK-domiciled Global Financial Cap fund. The Citywire A-rated duo invests in government and corporate bonds across the rating spectrum and makes up the bulk of their performance across the five-year analysis period.
The UK is well represented in his top ten holdings with bond holdings from four British issuers, including Lloyds Bank, Barclays and RBS, according to its latest factsheet. It also has about 32.3% of the fund allocated to BB-rated paper.
1. Bruno Crastes, H2O AM
Fund: H2O MultiBonds
Total returns June 2013-November 2015: 50.1%
Topping the list of best global bond managers is former Amundi manager Bruno Crastes, who launched his own boutique H2O MultiBonds in 2010. The H2O MultiBonds was launched in August 2010 and has since accumulated €1.1 billion ($1.2 billion).
The Citywire AAA-rated manager greatly outperform its JP Morgan Global GBI Broad TR benchmark, which fell 2.2% in the same analysis period. According to a Citywire interview in November, Crastes said he preferred European bonds in his global approach and has been negative on emerging markets bonds.