Fixed Income Boutique Corporate Bonds

Vontobel Fund - Global Corporate Bond Mid Yield

ISIN
LU1309987045
Valor
30148170

Fund strategy

Investment objective

This bond fund aims to generate steady income and achieve above-average investment returns over a full credit cycle, while respecting risk diversification.


Key features

The fund invests worldwide mainly in corporate bonds of issuers of good quality (investment grade) denominated in different currencies with various maturities. The focus is on global diversification and selection of individual securities to ensure that the credit spread compensates adequately for the risks involved. Within investment grade, the fund has an emphasis on the mid-yield segment (ratings A+ to BBB-). The fund uses derivative financial instruments, mainly for hedging purposes.


Approach

The seasoned and agile investment specialist team applies a research-driven investment process, combining a top-down approach to evaluate geographies and industries with bottom-up analysis to ensure optimal issuer and bond selection. The team takes high-conviction investment decisions, striving to benefit from global diversification and actively exploit market inefficiencies, such as relative-value opportunities, across market segments.


136.53
NAV
6.81%
Performance YTD
4 stars
As at Aug 06 2020 As of Jun 30 2020

Why invest?

  • Global: We create value by investing in the most attractive segments world-wide.
  • Depth: Liquidity of global bonds tends to be better than in a pure regional portfolio.
  • Value: Focus on the part of the investment-grade landscape where the credit spread compensates for the credit risk taken.

“Global credit offers an attractive running yield to escape the low-yield environment”

Christian Hantel, Senior Portfolio Manager

Our investment process

Our investment process begins with a top-down review, where we look at the development of key macro- and microeconomic data, taking into account technicals such as new supply and asset flows into or out of the asset class.

Then, with the use of our proprietary tools, we zoom in and identify around 200 attractive issuers from a benchmark universe of more than 2,000.

Once we have determined potential issuers to invest in, we conduct a thorough bottom-up analysis on each potential credit, resulting in a fundamental company view. By bringing this together with our overall market valuation, we come to a buy/hold/sell decision.

We then construct our portfolio based on regional, sector, issuer, duration, and other considerations.

A robust risk-management setup, with control and oversight independent of the primary risk owners, provides a solid cover for our entire investment process.

infograph-product-global-mid-yield_en

Investment opportunity – taking the eagle´s perspective on corporate bonds

We aim to select high credit-quality issuers in order to generate income over the long term. As individual regions are in various stages of the credit cycle and perform differently at any given point in time, a global portfolio provides better diversification than a single country or region approach. This can also significantly lessen the impact of local shocks on a portfolio (Brexit, European sovereign crisis etc.).

Furthermore, bonds from the same issuer, denominated in different currencies, often exhibit price discrepancies allowing us to create relative-value opportunities. By identifying the most attractive bonds across the main currencies, we are able to extract value for our investors, with the currency risk fully hedged. Also, a key driver of returns are bonds with the potential of a rating upgrade to the mid-yield range (so called "rising stars"). This gives us the opportunity to invest early and profit from the spread contraction as the bond climbs up the rating ladder.

Investment philosophy – focus on credit selection

Global corporate credit markets are diverse across segments and geography. Whilst mostly efficient, multiple drivers within these markets continually offer opportunities for active managers to generate alpha. These opportunities stem from, amongst other things, the rigid constraints under which some investors operate.

The mid-yield range is the dominant and most attractive part of the investment-grade landscape, where the credit spread most compensates for the risk taken.

Investment team

Christian Hantel manages the fund, supported by the Corporate Credit team headed by Mondher Bettaieb. The team also has at its disposal the full capabilities of the Zurich based Fixed Income boutique.

This optimal team structure enables proactive early idea generation and implementation.

All data is as at Jun 30 2020 unless otherwise indicated.

Daily Performance

Periodic Performance

1M YTD 3Y SI
G USD 2.3% 3.6% 6.4% 32.4%
Index 1.8% 3.4% 5.7% 29.3%

Rolling Performance

Jul 01 2015 - Jun 30 2016 Jul 01 2016 - Jun 30 2017 Jul 01 2017 - Jun 30 2018 Jul 01 2018 - Jun 30 2019 Jul 01 2019 - Jun 30 2020
G USD NA 5.1% 1.0% 10.5% 7.9%
Index NA 3.3% 0.7% 9.6% 7.1%

Annual Performance

Risk Data

Portfolio Index
Tracking error 2.7%
Sharpe ratio 0.5
Information ratio 0.2
Jensens alpha -0.8%
Beta 1.3
Yield to maturity 2.5% 1.9%
Yield to maturity after hedge 2.8% 2.1%
Yield to worst 2.4% 1.9%
Modified duration 7.1 7.2
Volatility 8.2%
Average rating BBB+ A-
Average coupon 3.5% 3.5%
Number of positions 228.0 15'303
Number of issuers 126.0 2'164
Active Share (country, issuer, ISIN) 20% / 72% / 96%
Past performance is not a reliable indicator of current or future performance. Performance data does not take into account any commissions and costs charged when shares of the fund are issued and redeemed, if applicable. The return of the fund may go down as well as up due to changes in rates of exchange between currencies. The value of the money invested in the fund can increase or decrease and there is no guarantee that all or part of your invested capital can be redeemed.

All data is as at Aug 06 2020 unless otherwise indicated.

Fund data
Portfolio Manager Christian Hantel
Fund Domicile Luxembourg
Fund Currency USD
Share Class Currency USD
End of fiscal year 31 August
Index ICE BofAML Global Corporate Index (G0BC) hedged into USD
Share Class Launch date Oct 29 2015
Distribution type Accum
Swinging single pricing Yes
Fund Registrations AT, CH, DE, ES, FI, FR, GB, IT, LU, NL, NO, PT, SE, SG
Share Class Registrations AT, CH, DE, ES, FR, IT, LU, SG
Nav Information
Highest since launch 135.95
Lowest since launch 98.01
Fund volume in mln. USD 572.15
Share class volume in mln. USD 58.07
Fees And Expenses
Management fee 0.34%
TER 0.48% (Feb 28 2020)
Identifiers
ISIN LU1309987045
Valor 30148170
Bloomberg VONGCHX LX
WKN A2ALPT
Parties
Depository RBC Investor Services Bank S.A.
Management Company Vontobel Asset Management S.A.
Swiss Paying Agent Bank Vontobel AG
Swiss Representative Vontobel Fonds Services AG

Available Share Classes

Share class Currency ISIN Distrib. Type Launch date Management fee TER TER Date
A USD LU1395536086 Dist Retail May 09 2016 1.10% 1.36% Feb 28 2020
AH (hedged) CHF LU1395536169 Dist Retail May 09 2016 1.10% 1.42% Feb 28 2020
AH (hedged) EUR LU1395536243 Dist Retail May 09 2016 1.10% 1.42% Feb 28 2020
AHN (hedged) CHF LU1683488198 Dist Retail Oct 12 2017 0.34% 0.87% Feb 28 2020
AHN (hedged) EUR LU1683488271 Dist Retail Oct 12 2017 0.34% 0.87% Feb 28 2020
AN USD LU1683487976 Dist Retail Oct 12 2017 0.34% 0.81% Feb 28 2020
B USD LU1395536599 Accum Retail May 09 2016 1.10% 1.36% Feb 28 2020
G USD LU1309987045 Accum Institutional Oct 29 2015 0.34% 0.48% Feb 28 2020
H (hedged) EUR LU1395536755 Accum Retail May 09 2016 1.10% 1.42% Feb 28 2020
HG (hedged) EUR LU1291112750 Accum Institutional Oct 29 2015 0.34% 0.54% Feb 28 2020
HG (hedged) CHF LU1831168353 Accum Institutional Jun 29 2018 0.34% 0.54% Feb 28 2020
HI (hedged) CHF LU1395536912 Accum Institutional May 09 2016 0.38% 0.83% Feb 28 2020
HN (hedged) EUR LU1734078667 Accum Retail Dec 11 2017 0.34% 0.87% Feb 28 2020
I USD LU1395537134 Accum Institutional May 09 2016 0.38% 0.77% Feb 28 2020
N USD LU1683487893 Accum Retail Oct 12 2017 0.34% 0.81% Feb 28 2020
Click here to see an overview of our shareclass naming convention.

* TER includes performance fee where applicable

All data is as at Jun 30 2020 unless otherwise indicated.

Rating Structure

Top 10 Country Exposures

Document Date DE EN ES FR IT
Factsheets & Commentaries
Factsheet Jul 2020
Monthly Commentary Jun 2020
Brochures
Product Flyer Oct 2019
KIIDs
KIID Aug 2020
Legal Documents
Articles of Association Apr 2016
Notification to Investors Apr 2020
Sales Prospectus Dec 2019
Financial Reports
Annual Report Aug 2019
Dividend Payout Jan 2019
Semi-Annual Report Feb 2020
Dealing Information
Holiday Calendar 2020 Jan 2020
List of Active Retail Share Classes Dec 2018
Policies
Sanctioned Countries Sep 2016
Shareclass Naming Convention Nov 2019
  • Limited participation in the potential of single securities

  • Success of single security analysis and active management cannot be guaranteed

  • It cannot be guaranteed that the investor will recover the capital invested

  • Derivatives entail risks relating to liquidity, leverage and credit fluctuations, illiquidity and volatility

  • Interest rates may vary, bonds suffer price declines on rising interest rates

  • Investment universe may involve investments in countries where the local capital markets may not yet qualify as recognised capital market

  • Investments in foreign currencies are subject to currency fluctuations

  • Mid-yield bonds may be more speculative investments than bonds with a higher rating due to higher credit risk, higher price fluctuations, a higher risk of loss of capital deployed

  • High-yield bonds (non-investment-grade bonds/junk bonds) may be subject to greater market fluctuations, risk of default or loss of income and principal than higher-rated bonds

  • The structure of ABS/MBS and the pools backing them might be intransparent which exposes the subfund to additional credit and prepayment risks (extension or contraction risks) depending on which tranche of ABS/MBS is purchased by the subfund

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