Since its launch on 30 April 2004, the Julius Baer Absolute Return Bond Fund has returned +18.19 per cent, outperforming three-month Euribor, Euro cash and short-term funds.
Since its launch on 30 April 2004, the Julius Baer Absolute Return Bond Fund has returned +18.19 per cent, outperforming three-month Euribor, Euro cash and short-term funds.
Annualised volatility has been a very moderate 2.41 per cent and the fund’s assets have grown to EUR2.6 bn, making it one of the largest absolute return bond funds in Europe.
Year-to-date the fund is up +4.42 per cent. The firm says all principal strategies (rates, credit, currencies and convertibles) continued to contribute positively to performance, with relative value trades across interest rate and credit markets adding most.
The fund aims to achieve sustained, positive returns across all market cycles – irrespective of whether interest rate, credit and currency markets are rising or falling.
Ralph Gasser (pictured), product specialist fixed income, Julius Baer Asset Management, says: ‘The extreme pricing dislocations across bond and currency bond markets offer a variety of outstanding opportunities unseen for decades. This is an excellent backdrop for funds which specialise in exploiting not only absolute but also relative valuation anomalies. We are still operating in markets characterised by little visibility both at the macro and micro level, meaning that pricing actions are largely driven by swings in sentiment rather than fundamentals and this is unlikely to change soon.
‘Trying to actively time markets is extremely challenging. Relative value focused strategies, however, offer a less risky approach to exploiting the variety of investment opportunities while still offering potentially very competitive returns. We believe relative value strategies will strongly outperform short-term investments like cash deposits and money market instruments, as well as governments bonds, for some time to come.’
While being overall long credit, the fund maintains its long/short strategy across the credit curve.
The fund’s main long positions are in the Norwegian Krone, Brazilian Real, South African Rand and Australian Dollar, against shorts in the US Dollar and the Japanese Yen.
