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Star Tracker: revisiting the rising stars of European bonds

Citywire Global tipped these managers for the top in 2010, now we find out how many have delivered on this early promise.

Rising Stars in European Bonds

In May 2010, Citywire Global ran the rule over the emerging talent in the European fixed income market and showcased 10 names posting strong, risk-adjusted performance on a one-year basis.

Fast forward 31 months and there has been considerable chopping and changes among the promising bond managers we first profiled.

First up Kan Zheng’s strategy was renamed the BNP Paribas L1 Bond Europe Opportunities fund and then closed in April 2011.

Other fund closures since our previous analysis are Hakem Saidi’s Pioneer Funds Euro Convergence Bond fund, the AEGON European Bond fund run by Euan McNeil – which was closed in August 2009 – and the Anima European Currencies Fund.

Two of the ECM Asset Management funds - the European Credit Fund Sicav - Danube and European Credit Fund Sicav - Elbe – are omitted due to a recent management change.

Meanwhile, Jean-Baptiste Roux, who had been noted for his performance on the Amundi Funds European Bonds fund, is omitted from this analysis, as he has since joined Bruno Crastes’ boutique H2O Asset Management, where he runs the H2O Tempo R-C fund.

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Andreas Burhoi, DWS

First up is Andreas Burhoi of DWS, who continues to run the DWS Europa Strategie (Renten). However, his performance has dipped and he is nearly 10 percentage points off his Citywire benchmark, the JP Morgan GBI Europe TR, over the past 31 months.

The dawn of 2013 marked the fifth anniversary of Burhoi’s tenure on the fund, which he runs alongside its global bond strategy, DWS Global Strategie (Renten).

His government bond-focused fund has 51% in developed world sovereigns and 25% in emerging market government debt. On a country basis, Burhoi has centred his €428 million fund on his home market of Germany (19.5%), while also looking at Poland (16%) and the Netherlands (12%).

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Marcus Tenaglia, Schelhammer & Schattera

Running one of the largest funds in this analysis is Marcus Tenaglia, who remains at the helm of the €207 million SUPERIOR 1 - Ethik Renten fund. Like Burhoi, he has run this fund since January 2008.

According to his most recent factsheet, Tenaglia has the majority of his exposure on a credit basis towards A- rated bonds, which make up 17.9% of his portfolio. Meanwhile, BBB-rated (16.7%) and AAA-rated (15.8%) bonds also make up a considerable proportion of the fund.

Tenaglia is another to have slightly lagged his Citywire benchmark over the past 31 months. He is just under two percentage points off the Citigroup WGBI (Hedged EUR)TR Index in the intervening analysis period.

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Yannick Lopez, OFI AM

One of the few managers to have beaten his benchmark in the European bond sector over the past 31 months is OFI AM’s Yannick Lopez. It is, however, by the narrowest of margins, as the OFI Euro Investment Grade fund has outperformed his benchmark by 0.06 percentage points.

The formerly Citywire AA-rated manager has achieved this outperformance from mainly betting on Europe’s banks, which make up nearly 30% of his sector exposure. Lopez also operates a wide-ranging approach to credit quality, with 22% in A-rated bonds, 20% in BBB and 15.4% in BBB+ rated bonds.

OFI AM announced plans to launch a new bond fund – the OFI Rendement 2016 – for Lopez in January of this year.

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Jens Vanbrabant, ECM Asset Management

The only one of three entries from ECM Asset Management to appear this time around is European Credit Fund Sicav – Interlaken.

Lead manager Jens Vanbrabant has since taken on two new funds - the European Credit Fund Sicav - Elbe and European Credit Fund Sicav - Danube.

In the meantime, Vanbrabant’s main strategy, the European Credit Fund Sicav – Interlaken, has slightly underperformed in the 31-month period to the end of December 2012. It returned 10.44% when its Citywire benchmark, the Barclays Euro Aggregate Corporate TR fund, rose 16.89%.

In the €187 million fund, which ECM defines as a multi-asset class credit fund, Vanbrabant invests primarily in investment grade corporate bonds (70%) and also has minor positions in investment grade ABS (13%) and investment grade EMD (5%).

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Andreas Auer, Gutmann KAG

The only manager to post something akin to strong performance in this catch-up analysis is Gutmann KAG’s Andreas Auer.

The former Citywire AAA-rated manager, who runs the Gutmann Anleihen Opportunitaetenfonds and has outperformed his benchmark by nearly six percentage points.

The Vienna-born fund manager currently runs six strategies on behalf of Gutmann, these cover European bonds, US bonds and also global fixed income. He was handed three portfolios almost immediately upon joining Gutmann from Raiffeisen Zentralbank in 2009.

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David Simner, Fidelity

Leading the pack last time around in terms of manager ratio was David Simner of Fidelity. His performance in this most recent analysis has seen him outperform on an absolute basis by 0.9 percentage points compared to his Citywire benchmark.

In the €3 million Fidelity Funds – MoneyBuilder European Bond Fund, Simner has invested mainly in European sovereign debt (46%). However, this is at a slight underweight to his benchmark. Meanwhile, he also has strong positions in industrials (24%) and financials (16%).

The sovereign debt of both Germany and Italy features prominently in his top 10 bond holdings. The two nations combined represent eight of the fund’s core allocations, while Spanish government debt and Swiss manufacturer Uster Technologies make up the two remaining positions.

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Related Fund Managers

Jens Vanbrabant
Jens Vanbrabant
41/71 in Bonds - Europe (Performance over 3 years) Average Total Return: 12.54%
Yannick Lopez
Yannick Lopez
31/71 in Bonds - Europe (Performance over 3 years) Average Total Return: 15.93%
Andreas Burhoi
Andreas Burhoi
69/71 in Bonds - Europe (Performance over 3 years) Average Total Return: 2.76%
Henrietta Pacquement
Henrietta Pacquement
19/130 in Bonds - Euro Short Term (Performance over 3 years) Average Total Return: 12.30%
David Simner
David Simner
50/264 in Bonds - Euro (Performance over 3 years) Average Total Return: 21.39%
Andreas Auer
Andreas Auer
Derek Hynes
Derek Hynes
Marcus Tenaglia
Marcus Tenaglia
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