7th January 2018

Bond Fund Performance Rankings: December 2017

Here’s a look at how the largest and top performing funds fared in the quarter/year to the end of December 2017.

Using the Market iBoxx indices as a guide, the euro-denominated IG cash index returned 2.4% in 2017. However, the top performing funds delivered well in excess of that – usually helped by running a beta in excess of the index and having a decent high yield component in their portfolios.

The performance of the reasonably-sized funds has the Schroder ISF Euro Credit fund (AUM €1.8bn) returning 6.84% for the Conviction Fund in the year, while the larger ISF Euro Corp fund (AUM €8.9bn) came up with just over 5% in returns. In comparison, the €5.4bn MS INVF Euro fund returned 4% and the €3.5bn – sized Bluebay IG Fund came up with 4.22% in the year.

Top of the pile was the €457m assets under management in the Nordea 1 European Fincl Dbt fund with a 12.55% return, but mostly anything over 3% represented a good performance for this market last year.

>>See the full IG Euro Performance tables<<

European high yield had another fine year in 2017. The iBoxx index came up with 6.3% in total returns.

The fund data shows that the largest funds managed to just match the index with the likes of the Fidelity European HY A fund (6.25%, AUM €3.6bn) and the UBS Lux BF Euro fund (6.66%, AUM2.6bn) probably the pick of the bunch of the largest funds.

The smaller Deutsche Invest (6.15%, AUM €1.5bn) and Schroder ISF Euro HY fund (7.23%, €1.3bn) are worthy of a mention.

Of the midsized funds, Evli European HY fund (6.9%, AUM €834m) and the Pictet-Eur HY I fund (6.61%, AUM €777m) had a good year. The latter’s Short Term HY fund fared less well, on AUM of €3.4bn, the annual performance was just 1.72%.

>>See the full HY Euro Performance tables<<

In sterling, IG cash for the Market iBoxx index finally managed to close the year with 5% in total returns, and it seems like many of the largest funds got there too.

The £4.9bn Scottish Widows Corp bond fund fell short at 4.05%, but the IP Corp Bond fund (AUM £4.7bn) was up 5.7%, M&G’s Corp fund at 5.54% (AUM £4bn) with the smaller Royal London Sterling Credit Z fund some 7.51% (AUM £1.6bn). Rathbone’s £931m Ethical Bond R Acc fund was top of the pile, up over 10% for the year, with Kames’ IG A Acc up 6.94% (AUM £1.5bn).

In the sterling high yield market, the L&G High Income (AUM £1.4bn) delivered a good 9.8% and 6.3% in the 12 month and 3 month periods to the end of December, respectively, and is once again the notable out-performer in the high yield space.

>>See the full Sterling IG & Sterling HY Performance tables<<

Suki Mann

A 30+ year veteran of the European corporate bond markets and in his role as Credit Strategist, Dr Mann has been ranked number one in the Euromoney Investor Survey eight times in ten years. Previously with Societe Generale and UBS, he now shares views of events in the corporate bond market exclusively here on CreditMarketDaily.com.