BlueBay Global Investment Grade Corporate Bond
This is a core bond fund which targets a combination of income and modest capital growth potential. The fund invests globally but typically has significant exposure to the US. As the name suggests, the fund invests predominately in investment grade bonds although it does have a small provision to invest up to 15% of its assets in high yield bonds.
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Our Opinion
A core fixed income offering which has consistently delivered over time. The fund’s target benchmark is tough to beat and yet this fund has managed to do that. BlueBay are fixed income specialists and this fund is very well resourced with dedicated macro, credit sector, credit analysts and ESG analysts feeding into the fund managers. The process is very well defined and proven. Relative to the benchmark it won’t shoot the lights out but it’s unlikely to let you down either. This fund is a really solid option which could be used in almost any portfolio with a bond allocation.
Fund Managers
Andrezj Skiba, Fund manager
Andrezj Skiba joined BlueBay in 2005. Prior to that he worked as a credit analyst for Goldman Sachs. Andrezj spent his first four years at BlueBay as a credit analyst covering the technology, media and telecommunications (TMT), utilities and retail sectors. He became a portfolio manager in 2009 and is now head of US fixed income and a senior portfolio manager. He is a CFA charter holder and has 22 years investment experience.
Tom Moulds joined BlueBay in 2005 and the investment grade bond team in 2007. Prior to joining, Tom worked as a financial analyst for Schneider Electric. Tom has been a key driver of BlueBay’s success in European investment grade credit. He is now a managing director and senior portfolio manager. He also helped to launch the Capital Income fund and the Impact-Aligned Strategy. He is a CFA charterholder and has 18 years investment experience.
Marc Stacey joined BlueBay as an operations analyst in 2004 before joining the investment grade credit team in 2006 as a trader. Prior to that he spent two years at CSFB focusing on credit derivatives. He moved to his current role in 2011 and has been a key factor in BlueBay’s success in European investment grade credit. Marc has delivered strong performance on the Financial Capital Bond fund.
Thomas Moulds , Fund manager
Thomas Moulds is a Managing Director and a BlueBay Senior Portfolio Manager within the Investment Grade team. His focus is on European non-sovereign debt for which he manages BlueBay's European Corporate Strategy, including a flagship mutual fund and several bespoke mandates. Tom joined BlueBay Asset Management in December 2005 and the Investment Grade team in July 2007. Prior to BlueBay, he worked as a financial analyst at the UK head office of Schneider Electric. Tom holds a BSc degree in Mathematics from the University of Wales, Swansea, and is a CFA charterholder.
Marc Stacey, Fund manager
Marc Stacey is a BlueBay Senior Portfolio Manager within the Investment Grade team focusing on non-sovereign debt and specialising in financials. Marc started at BlueBay Asset Management in June 2004 as an operations analyst before joining the Investment Grade Debt Team in March 2006 as a trader. He moved to his current role in January 2011. Prior to BlueBay, Marc spent two years at CSFB focusing on credit derivatives. He holds a Bachelor of Business Science (Hons) in Economics and Finance from the University of Cape Town, South Africa.
Neil Sun , Fund manager
Neil Sun is a BlueBay Portfolio Manager within BlueBay's Investment Grade team and joined the firm in March 2014. Prior to joining BlueBay Asset Management, he worked at BlackRock in their Client Analytics Group, as an associate. Neil graduated Summa Cum Laude from Baruch College with a BA degree in Finance and Investments. Neil is a CFA charterholder.
Risk
This is a core product with a target of beating the benchmark, the Bloomberg Global Aggregate Corporate Bond Index, by 150 basis points after fees. Risk is carefully managed. Most alpha is expected to be added through credit selection.
Company Description
BlueBay is part of RBC Global Asset Management. The asset management division of the Royal Bank of Canada. BlueBay is a specialist fixed income manager and manages $108bn of assets. BlueBay is a global company with a presence on the ground in many markets around the world including the UK, Australia, China, Japan and the USA. They employ 135 investment professionals and manage 49 specialist strategies.
Investment process
The BlueBay fixed income philosophy is grounded in a belief that markets are inefficient and
can be exploited. The firm’s investment approach is consistent across their products. Every
product is broken down with a benchmark, alpha target and the alpha sources expected to
contribute to outperformance. This is one of their more core offerings.
Performance is derived from three specific sources. These include term structure, which encompasses interest rate duration and positioning on the yield curve and any inflation-linkage; credit beta - corporate spread duration and sovereign spread duration; and credit alpha - individual bond selection, issuer and instrument, country and sector
An important initial part of the process is idea sharing and discussing the latest insights. The
CIO and senior risk takers have an investment forum meeting once a week. A macro group,
consisting of senior investment professionals, meets daily to provide timely analysis on key
macro-economic and market developments.
A team of ten macro experts feeds ideas into the three portfolio managers. Team members
each have their own specialist areas. Macro trends within the overall investment
environment are discussed and debated. Fundamental country research identifies the value
in each market. Every element of an investment (valuation, technicals, ESG, fundamentals)
is assigned a score from +3 to -3. This then leads to an overall +3 to -3 score, with +3 being
the most positive and the highest potential for alpha.
The fund is expected to have between 80 and 250 issuers.
Risk
This is a core product with a target of beating the benchmark, the Bloomberg Global Aggregate Corporate Bond Index, by 150 basis points after fees. Risk is carefully managed. Most alpha is expected to be added through credit selection.
ESG
ESG – Integrated
ESG is a critical part of this fund and has become an even bigger part of the process in recent years. A number of sectors are automatically excluded from the investment universe. These include; controversial weapons and tobacco. In addition, controversial jurisdictions, in violation of UN conventions, will be excluded. ESG risks are included as a fundamental part of credit assessment. Alongside their conventional credit analysis they have developed an ESG evaluation framework. Every issuer is given a fundamental ESG score which is determined by the ESG investment team and the credit analyst. The worst ESG-rated issuers are excluded from the investment universe.
In addition, every potential investment is given a separate ESG score which includes the materiality and relevance of the ESG risk factors to the investment. This is solely assessed by the credit analyst/portfolio manager.
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