The year ahead will be greatly shaped by which credits bond buyers stay away from as much as those they back to outperform, Vontobel's Christian Hantel has said.
‘This year will be a lot about avoiding credit stories that turn in the wrong direction,’ said Hantel. ‘We’ve seen one example is Teva, the big pharmaceutical company, which was downgraded finally to high-yield.
‘I think research-driven investment processes will really benefit this year to avoid those credit stories.’
Hantel’s Vontobel Fund - Global Corporate Bond Mid Yield fund was launched in early 2017 and has returned 4.3% over the last year.
To continue growth, Hantel told Citywire his ongoing strategy includes investing in sector leaders. He said: ‘For banks, it’s really mostly about the national champions.
'Especially when we go down the capital structure, when we go to subordinated paper or even AT1 securities, which is a bit at the low end of the spectrum in terms of rating.
‘On the senior secured level you could argue that you focus a bit more on the small-medium sized players, because then you pick explicitly a senior unsecured note. But, for investments down the cap structure, we stick to national champions.’
According to his latest factsheet, Hantel’s fund also invests several points above the benchmark in Spain, Switzerland, and Brazil, while being nearly eight percentage points under the benchmark in the United States.