Author Archives: admin
Author Archives: admin
GJ Prasad’s Trade Ideas column has been providing actionable, tactical trading ideas in bank subordinated debt and single name CDS in the form of a weekly note.
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The reduced level of support for Merkel and the surge of the far right managed to inject only but just a little uncertainty into the markets, despite the CDU’s German election victory. The fact that it wasn’t as straightforward a victory as the markets would have liked – with a new coalition make-up uncertain following a poorer showing by the Social Democrats, was enough to inject some clear apprehension into the opening session of the week. On reflection, that’s completely understandable given that the markets don’t like uncertainty. Still, the opening skirmishes might have been fraught with angst, but the session settled quickly and we ended fairly flattish without much of a fuss.
The CDU needs new partners for coalition government given that the previous one (the Social Democrats) has said that it will go into opposition, with a so-called ‘Jamaica alliance’ likely to be negotiated. That could take several months and potentially lead to some changes in policies from the Eurozone’s main economic powerhouse. Whatever, it promises to be a delicate situation for Merkel to manoeuvre and potential partners with the CDU will be extracting their political pound of flesh.
While the economists opine and some fret about what next, it does seem like it is yet another potential ‘destabilising event’ – in a long list of them over the past couple of years – which the markets are going to swat aside. In this case, there’s some method in that madness. After all, in say the corporate bond markets, why should a new coalition government (with the old guard generally in charge) lead to spread market weakness? We don’t think it should.
Here’s our round up of the how the largest and best performing funds fared in April 2017.
The largest IG euro corporate bond fund – Schroder’s ISF Euro Corp Fund (AUM €8bn) – returned 9.24% on an annualised basis in the three months to end April 2017. The best performing fund in the same period, though, was the much smaller Nordea 1 Fund (AUM just €261m) which delivered 17.8% performance.
> Full IG Euro Performance tables
Generally, on an annualised basis, the average performance across the market was for returns of between 5-9%. A notable exception was the €2.5bn Pioneer Euro Corp Fund which returned just 1.98% of performance.
In the 12-month period to end April 2017, GAM stays top of the list with its Star Credit Opportunities Fund returning a stellar 13.2%.
In high yield, Fidelity and UBS (Lux) stand out returning 9.46% and 9.39% (annualised) in the 3 months to April 2017 with AUM of €3.8bn and 2.9%, respectively. Finland’s Evli and Schroder’s ISF funds top the list generating returns of 11.4% and 12.5% on AUM of €900m and 756m, respectively.
> Full HY Euro Performance tables
For sterling, the IP Corporate Bond Fund (AUM £4.8bn) returned 9.81% versus 23.9% for the much smaller F&C Institutional Long dated Corporate Fund (AUM just £46.5m) in the 3-months to April 2017, both annualised. Overall, the average IG sterling funds returns in the Morningstar category returned 13.45% (annualised) in the 3 months to end April 2017.
The Q1 2017 credit market charts & analysis are now in for yields, spreads, returns and issuance.
We’ve enhanced the charts and graphs here on creditmarketdaily.com to include the ability to ‘hover’ over them with your mouse pointer to reveal the data points from that particular point in time. Just give it a try.
If you prefer to use short cuts to these charts, click the links below:
An exciting (and free!) new feature has just been added to creditmarketdaily.com, comparing the performance of the top fund managers across the euro and sterling corporate bond funds.
This new addition is updated as a monthly service and it can be accessed via this link: https://www.creditmarketdaily.com/corporate-bond-fund-performance/
You can also access this great new feature via links on the menu bar on creditmarketdaily.com.
Today we release the inaugural creditmarketdaily.com Corporate Bond Market Review. This FREE report covers the first half of 2016.
If you are not already, why not become a premium subscriber and enjoy daily commentary on the European corporate bond markets.