TRUSTNET
“The equal split between rates,
credit, inflation and currency is
attractive – most managers are
essentially managing credit plus
interest rate duration,” it explained.
“It was impressive to see the fund
make money by betting on long
duration – this has been a very
unpopular position for bond
managers to take in recent years.”
FACT BOX
MANAGERS: Mike Riddell & Kacper Brzezniak / LAUNCHED: 16/05/2002 / FUND SIZE: £1.3bn /
OCF: 0.65%
CROWN RATING
PERFORMANCE OF FUND VS SECTOR AND INDEX OVER 10YRS
IA Sterling Strategic Allianz Strategic Bloomberg Barclays Global
Bond (47.62%) Bond (91.20%) Aggregate Hedge (43.95%)
100%
80%
60%
40%
20%
0%
r1
-20%
T
positions in mid-March and then
managed to take advantage of the
luxury of having a near 100 per cent
super liquid portfolio to hoover up
a large number of insanely cheap
investment grade corporate bond new
issues,” he said.
The manager added that, going into
the downturn, the fund was helped
by its strong liquidity position which
allowed it to take advantage of wide
credit spreads.
“In March, any company trying to
issue new debt during the distressed
market conditions was having
to pay sometimes 0.5 per cent
additional yield on top of the very
same company’s bonds that already
existed,” Riddell said.
One reason why the fund performed
so well in March – and why it is
currently attracting the attention
of so many professional investors
– is its differentiated approach to
fixed income. Riddell and Brzezniak
Allianz Strategic Bond
buy global bonds rather than just
focusing on the UK and also aim
to maintain a low correlation to
world equities.
The FE Investments team, which
holds Allianz Strategic Bond on
its Approved List, said that this
correlation is “lower than most
strategic bond funds, including some
on our shortlist”.
This fund made 12.48 per cent in the first three months of the year as
markets plummeted
he third quarter of 2020
proved to be one of the
most difficult on record for
investors, as the coronavirus-related
economic shutdown hammered
markets. However, some funds did
manage to make money and one of
the best performers during this time
was Allianz Strategic Bond.
Managed by Mike Riddell and
Kacper Brzezniak, the £1.2bn
fund made 12.48 per cent in the
first three months of the year, the
seventh-highest figure out of the
4,045 strategies in the Investment
Association universe. Meanwhile,
its average peer in the IA Sterling
Strategic Bond sector lost 6.4 per cent.
In a recent update, Riddell
explained how he used March’s
volatility to bolster the portfolio after
its existing positions protected it
against the sell-off.
“After corporate bonds sold off
violently, we closed out our short
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In focus
Source: FE Analytics
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