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Citywire Switzerland awards: bond winners revealed

We highlight the fund groups and managers with the highest risk-adjusted returns.

Citywire Switzerland held its second Citywire Switzerland Award Ceremony on 4 April.

At Baur au Lac in Zurich we announced the winning fund managers and groups that stayed ahead of their peers over the past three years to 31 January 2017.

The best fund manager award went to the individuals with the highest risk-adjusted returns at a sector level. In order to qualify, fund managers must run a fund registered for sale in Switzerland.

Our ratings methodologies are actuarially approved by AKG Actuaries & Consultants.

Here we present the four fund managers who took gold in the following bond categories: global, global high yield, Swiss franc bonds and emerging markets global hard currency.

The full list of the bond nominees you can find here.

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Bonds – global

Charles Zerah

Carmignac

This Citywire A-rated fund manager is responsible for the Carmignac Pfl Global Bond A CHF acc Hdg fund.

The top three sectors of the strategy are financials (50.11%) with half of this in the banking names, followed by energy (29.48%), which mainly consists of oil, gas and consumable fuels and materials (11.36%).

More than 40% of the fund's holdings have a maturity less than one year. The top five bond holdings in the strategy are various types of the US bonds.

In his latest investment commentary Zerah said the political risk widened the yield spread between Germany and France, therefore German positions were a drag on the performance.

However, on the emerging markets front the fund manager was aided by Brazil with its falling inflation and more accommodating monetary policy.

Other beneficial positions in the fund were corporate bonds from commodity and financial sectors. The fund’s currency position was supported by exposure to the US dollar.

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Bonds – global high yield

Sander Bus

Robeco

Sander Bus is portfolio manager of the CHF8 billion Robeco High Yield Bonds fund. The top three sectors of the fund are consumer cyclical (17.1%), communications (15.9%) and consumer non-cyclical (13.6%). The biggest underweights against the benchmark is communications, while the biggest overweight is banking. The cash position is 7.4% at the moment.

In his latest investment commentary the fund manager said the top positions are dominated by US healthcare, European telecom and consumer-related sectors.

‘The big US hospital chains are among the largest HY issuers in our benchmark. We favor these companies because of the stability of their earnings, their high margins and the favorable regulatory environment,’ he added.

Another favourite sector of the fund manager is European cable, which he likes for similar reasons. He also plays the recovery of the consumer through such cyclical names like homebuilder DR Horton, retailer Limited Brands and car rental company Avis.

According to the February commentary an overweight in ArcelorMittal was the biggest contributor to the fund, as the European steelmaker is heading back towards an investment grade rating on the back of the current commodity prices.

The biggest detractor of the fund that month was the absence of exposure to Intelsat (CCC) as he said bond prices jumped a few points after Softbank announced a potential takeover.

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Bonds – Swiss franc

Sandro Grimm

Swisscanto Invest by Zürcher Kantonalbank

The Citywire AA-rated fund manager is navigating a challenging sector in his SWC (CH) BF CHF (II) N and SWC (CH) BF Nachhaltigkeit CHF N funds.

Financials is the biggest sectoral allocation of the SWC (CH) BF CHF (II) fund with 55.86% of exposure, followed by the government bonds, which take 28.59% of the strategy.

The fund is underweight bonds with more than 15 years of maturity, with its exposure at 31.66% versus 36.85% in the benchmark Swiss Bond Index (SBI) AAA-BBB Total Return. Bonds with maturity from three to five years are an overweight, at 11.23% against 9.15% in the benchmark.

Among top positions are Swiss government and cantonal bank bonds with Kanton Zurich closing the top 10 holdings.

Speaking to Citywire Switzerland in July 2016, shortly after Swiss 50-year bonds dropped into negative territory for the first time, Grimm said he is not reaching for riskier assets.

Instead, he invests in medium- and long-term bonds and doesn’t hold those to maturity.

‘The return for longer dated bonds is still positive over a 12-month horizon. Buying a 10-year or 20-year government bond and holding it, for instance, for one year may lead to a positive return as you roll down the curve.’

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Bonds – emerging markets global hard currency

Eric Lambi and James Valone

Wellington Management

The fund managers are in charge of the Wellington Opportunistic EM Debt fund.

The risk stance of the portfolio managers is mainly based on the fund managers’ assessment of the health of the global economy, secular trends that could drive EM fundamentals and relative valuation estimations. After this stage both managers do an in-depth sovereign credit research.

According to the factsheet from the end of June 2016 the fund was overweight emerging Europe, Middle East and Africa against JPM EMBI Global and underweight emerging Asia.

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Related Fund Managers

Charles Zerah
Charles Zerah
7/14 in Mixed Assets - Emerging Markets (Performance over 3 years) Average Total Return: 11.08%
Sandro Grimm
Sandro Grimm
7/43 in Bonds - Swiss Franc (Performance over 3 years) Average Total Return: 5.44%
James Valone
James Valone
5/21 in Bonds - Emerging Markets Global Hard Currency (Performance over 3 years) Average Total Return: 13.09%
Events
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    Citywire DACH 2016

  • Citywire Switzerland 2016

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  • Citywire Zurich Alt Ucits 2016

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  • Citywire Zurich 2016

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  • Citywire Switzerland 2015, Gstaad

    Citywire Switzerland 2015, Gstaad

  • Zurich Forum 2015

    Zurich Forum 2015

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    Zurich Forum 2015

  • Geneva Roundtable 2015

    Geneva Roundtable 2015

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    Geneva Forum 2015

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    Geneva Forum 2015

  • Citywire Gstaad 2014

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