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Star Tracker: checking up on HY’s former global elite

They were the best performers in the global high yield sector between 2005 and 2010. Now, two and a half years later, we go back and see how they have fared.

Top performing global high yield managers 2005 to 2010

Our latest analysis looking back at the global high yield sector’s past top performers reveals how these managers have done over the last two and half years.

In a field of 28 competitors the Alliance Bernstein trio of Paul DeNoon, Douglas Peebles and Gershon Distenfeld emerged as the dominating force over five years to the end of March 2010. Other managers such as Schroders Wesley Sparks and Putnam’s Paul Scanlon also featured in the top performing list of that period.

Today, two of the seven funds have been closed. The second top performing manager John Lupton was replaced on the GA Fund Bond High Yield Euro Cap on January 2010 by Olivier Monnoyeur before it was closed two years later.

The last fund on the list, FdF High Yield managed Raimundo Marcialis and Gianmarco Stanga, was only recently closed and was shut down in July 2012.

Also, Per Wehrmann no longer runs the DWS High Income Bond fund and it has been taken over by colleague Markus Wiedemann.

Note: The BofA Merrill Lynch Global High Yield has been used in the following performance graphs to chart the funds’ progress since March 2010 to October 2012.

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Julius Baer BF Global High Yield

Starting off our list is Greg Hopper who was in sixth position in the 2005-2010 top manager list. He works for the US firm Artio Global Investors and runs the fund on behalf of the Julius Baer group.

Since the end of our previous analysis he has underperformed the benchmark by over 17 percentage points between March 2010 and October and is ranked around 66th out of 75 managers over this period.

The current top sector allocations in his €323 million fund are banks (13.3%), media companies (11.7%) and the oil industry (9.3%).

His largest holdings include US T-Bills – his only top quality investment grade position - chemical firm MacDermid and underwater tech group Deep Ocean.

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DWS High Income Bond

Next in the list is German manager Per Wehrmann of DWS Investments.

While he remains with the group he no longer runs the High Income fund and his colleague Markus Wiedemann took over as lead manager mid-2010. Wehrmann now runs the DWS Invest Euro High Yield Corporates.

Since our previous analysis the High Income fund has underperformed the BofA Merrill Lynch Global High Yield benchmark, with the fund posting around half the returns of the index.

Among its top country allocations are the US (28%) and Germany (19%) while its largest holdings are Unitymedia Kabel, Conti-Gummi Finance and Origin Energy Finance.

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Putnam Global High Yield

The US group’s co-head of fixed income Paul Scanlon has struggled to rekindle the performance that saw him take fourth place in our previous analysis.

He is trailing the benchmark after posting returns of 24.4% over the last 31 months in his $1.1 billion Putnam Global High Yield fund. However, he is the best performing manager of all those included in our top performing list.

The fund’s current largest sector allocation is towards the energy sector (13.8%) which is also his largest overweight. His next biggest allocation is towards financials (11.4%) but is the largest underweight he currently runs.

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Schroder ISF Global High Yield

Previously second placed Wesley Sparks has joined his fellow managers in underperforming the benchmark since our five year analysis piece.

His $4.2 billion Global High Yield fund has fallen behind the BofA Merrill Lynch Global High Yield benchmark and has underperformed it by around 9 points over the last two and a half years.

Sparks has been running it since April 2004 and invests the majority of his fund (71%) in the industrials sector.

Next in line is financials and his current top holdings are US T-bills, Hong Kong-based industrial consultancy firm Sprint Capital and aircraft manufacturer Bombardier.

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AllianceBernstein Global High Yield

The Euro Stars A-rated trio Douglas Peebles, Paul DeNoon and Gershon Distenfeld run one of the largest mutual funds in the Citywire database and have also struggled to beat the benchmark since March 2010.

The $22 billion fund has underperformed returning 24.07%, just behind’s Paul Scanlon’s Putnam fund. Its current top country allocation is towards the US (63.3%) with other countries following far behind.

In second place is Brazil with only 3.4% and Russia with 3.1%. Its largest holdings are in Turkish, Brazilian and Argentine government bonds and its top corporate bond is Russian energy giant Gazprom.

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Related Fund Managers

Paul Scanlon
Paul Scanlon
30/62 in Bonds - Floating Rate Notes (Performance over 3 years) Average Total Return: 14.19%
Wesley Sparks
Wesley Sparks
90/208 in Bonds - US Dollar Medium Term (Performance over 3 years) Average Total Return: 7.25%
Gershon Distenfeld
Gershon Distenfeld
132/186 in Bonds - US Dollar High Yield (Performance over 3 years) Average Total Return: 17.76%
Paul DeNoon
Paul DeNoon
77/241 in Bonds - US Dollar (Performance over 3 years) Average Total Return: 10.38%
Gregory Hopper
Gregory Hopper
76/120 in Bonds - Global High Yield (Performance over 3 years) Average Total Return: 11.16%
Douglas Peebles
Douglas Peebles
12/72 in Bonds - Europe (Performance over 3 years) Average Total Return: 23.57%
Per Wehrmann
Per Wehrmann
21/75 in Bonds - Euro High Yield (Performance over 3 years) Average Total Return: 30.49%
Markus Wiedemann
Markus Wiedemann
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