Some funds succeed amid bad month for bonds

funnel reductionA net €28 billion flowed out of bond funds in Europe in June as investors responded to signals that the United States Federal Reserve will taper bond purchases. Bond yields have ticked up significantly since Fed chairman Ben Bernanke hinted at an end to the bank's quantitative easing programme. Yet bonds remained the best-selling asset class this year, according to data from Lipper, with bond funds having attracted more than €80 billion in the first six months of 2013, even accounting for the outflows in June. “Even though bond funds showed net outflows for the month as a sector, the detailed numbers for the different types of funds in this asset class varied a lot,” says  Detlef Glow, head of research, Europe, Middle East and Africa, at Lipper. Emerging market bond funds and high yield bond funds were hard hit, with net outflows from these fund categories of about €5 billion each in June. But short-term European bond funds, flexible and speciality bond funds attracted new inflows during the months. Some bond funds were able to post good returns in the second quarter despite the turmoil caused by Bernanke's statements. Fund analytics firm Camradata says the best performing global bond fund in the quarter was the Scout Unconstrained Bond Strategy, by Scout Investments, which scored high on its various measures of consistency and efficient employment of risk. “In the global fixed income universe Scout Investments were able to weather the change in market sentiment by finishing at the top of the rankings,” says a Camradata report. “Their ability to produce strong relative and risk adjusted returns as well as showing genuine skill in beating the benchmark allowed them to push themselves ahead of the competition.” The best-performing emerging market hard currency debt fund was the Emerging Markets Fixed Income Composite fund from Logan Circle Partners, according to Camradata's rankings, while the best European broad bond fund in the quarter was the FF Euro Bond Fund from Fidelity Worldwide Investment. ©2013 funds europe

Executive Interviews

INTERVIEW: Put your money where your mouth is

Jun 10, 2016

At Kempen Capital Management, they believe portfolio managers should invest in their own funds. David Stevenson talks to Lars Dijkstra, CIO of the €42 billion manager.

EXECUTIVE INTERVIEW: ‘Volatility is the name of the game’

May 13, 2016

Axa Investment Managers chief executive officer, Andrea Rossi, talks to David Stevenson about bringing all his firm’s subsidiaries under one name and the opportunities that a difficult market...


ROUNDTABLE: Beyond the hype

Oct 13, 2016

The use of smart beta investing continues to grow. Our panel, made up of both providers and users, discusses what the strategy actually means, how it should be used and the kind of pitfalls that may arise when using this innovative investment technique.

MIFID II ROUNDTABLE: Following the direction of travel

Sep 07, 2016

Fund management firms Aberdeen and HSBC Global meet with specialist providers to speak about how the industry is evolving towards MiFID II.