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Investec GSF Global Bond Fund A Inc - News
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Investec GSF Global Bond comment - Dec 09
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Thursday, 25 March 2010
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Fund Manager Comment
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Market Background
Government bond yields rose sharply during the month of December. This was led by the UK gilt market which sold off after the Pre-Budget Report failed to reassure investors about the sustainability of UK public finances. Further evidence of an economic recovery led to a further narrowing of credit spreads in both the investment grade and high yield space.
Fund Performance
The Fund returned -3.6% during December ('A' share class, net of fees, in US dollars), outperforming the Citigroup World Government Bond Index which returned -5.0%.
The Fund's outperformed was mainly due to a significant short duration position in government bonds (predominantly in gilts and US Treasuries) in anticipation of a sell-off in government debt. Reasonable relative performance from corporate bond holdings also benefitted the Fund, with further evidence of an economic recovery helping to narrow credit spreads versus government bonds. Financial bond issues held by the Fund performed especially well.
The currency exposure of the Fund also boosted returns. This was in part due to the decision to build exposure to the cheap US dollar at the expense of more expensive major currencies, such as the euro and the New Zealand dollar.
Market Outlook
We believe 2009 was an exceptional year, with cheap valuations, improving fundamentals and low interest rates delivering very strong returns across a range of asset types. In our view, 2010 is likely to be a less spectacular year for markets, but should still offer opportunities for fixed income investors to generate decent returns. In particular, we believe the strength of the economic recovery should continue to help credit and emerging markets debt to outperform, especially bonds offering good relative value and with improving fundamentals. We believe stronger growth, heavy borrowing and a reduction in central bank buying should push government yields higher. Currency markets offer potential and we see good relative value in a number of developed and emerging currencies, including the US dollar and sterling. In our view, volatility may also pick up, especially once monetary policymakers begin to raise interest rates, but this should also create new investment opportunities.
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Investec GS Global Bond comment - Sep 09
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Tuesday, 15 December 2009
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Fund Manager Comment
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The Global Bond Fund is able to invest across the full spectrum of quality fixed-income assets. It generally employs a conservative strategy, focusing on quality government bonds denominated in US dollars, yen, sterling and euro. However, it will also, from time to time, invest in high-quality corporate bonds in any of the major developed economy markets. In addition, the Fund may invest in currencies with the aim of improving potential returns and increasing diversification.
The Fund Manager aims to tap the multiple sources of potential return available in bond markets using a variety of strategies including:
· Active management of the Fund's duration
· The purchase of short- or long-dated bonds based on expectations of inflation and interest rate movements
· Investment in currencies expected to appreciate
· Asset allocation between different global bond markets
· Diversification into corporate bonds, which can offer higher yields in an attractive environment for risk.
Global bonds tend to offer the prospect of some capital returns, combined with steady income payments, provided inflation expectations remain moderate and interest rates do not rise sharply.
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Investec GS Global Bond comment - Jun 09
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Sunday, 13 December 2009
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Fund Manager Comment
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The Global Bond Fund is able to invest across the full spectrum of quality fixed-income assets. It generally employs a conservative strategy, focusing on quality government bonds denominated in US dollars, yen, sterling and euro. However, it will also, from time to time, invest in high-quality corporate bonds in any of the major developed economy markets. In addition, the Fund may invest in currencies with the aim of improving potential returns and increasing diversification.
The Fund Manager aims to tap the multiple sources of potential return available in bond markets using a variety of strategies including:
· Active management of the Fund's duration
· The purchase of short- or long-dated bonds based on expectations of inflation and interest rate movements
· Investment in currencies expected to appreciate
· Asset allocation between different global bond markets
· Diversification into corporate bonds, which can offer higher yields in an attractive environment for risk.
Global bonds tend to offer the prospect of some capital returns, combined with steady income payments, provided inflation expectations remain moderate and interest rates do not rise sharply.
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Investec GS Global Bond comment - Mar 09
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Tuesday, 9 June 2009
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Fund Manager Comment
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The Global Bond Fund is able to invest across the full spectrum of quality fixed-income assets. It generally employs a conservative strategy, focusing on quality government bonds denominated in US dollars, yen, sterling and euro. However, it will also, from time to time, invest in high-quality corporate bonds in any of the major developed economy markets. In addition, the Fund may invest in currencies with the aim of improving potential returns and increasing diversification.
The Fund Manager aims to tap the multiple sources of potential return available in bond markets using a variety of strategies including:
· Active management of the Fund's duration
· The purchase of short- or long-dated bonds based on expectations of inflation and interest rate movements
· Investment in currencies expected to appreciate
· Asset allocation between different global bond markets
· Diversification into corporate bonds, which can offer higher yields in an attractive environment for risk
Global bonds tend to offer the prospect of some capital returns, combined with steady income payments, provided inflation expectations remain moderate and interest rates do not rise sharply.
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Investec GS Global Bond comment - Dec 08
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Friday, 27 March 2009
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Fund Manager Comment
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The Global Bond Fund is able to invest across the full spectrum of quality fixed-income assets. It generally employs a conservative strategy, focusing on quality government bonds denominated in US dollars, yen, sterling and euro. However, it will also, from time to time, invest in high-quality corporate bonds in any of the major developed economy markets. In addition, the Fund may invest in currencies with the aim of improving potential returns and increasing diversification. The Fund Manager aims to tap the multiple sources of potential return available in bond markets using a variety of strategies including:
_Active management of the Fund's duration
_The purchase of short- or long-dated bonds based on expectations of inflation and interest rate movements
_Investment in currencies expected to appreciate
_Asset allocation between different global bond markets
_Diversification into corporate bonds, which can offer higher yields in an attractive environment for risk.
Global bonds tend to offer the prospect of some capital returns, combined with steady income payments, provided inflation expectations remain moderate and interest rates do not rise sharply.
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Investec GS Global Bond comment - Sep 08
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Thursday, 27 November 2008
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Fund Manager Comment
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The Global Bond Fund is able to invest across the full spectrum of quality fixed-income assets. It generally employs a conservative strategy, focusing on quality government bonds denominated in US dollars, yen, sterling and euro. However, it will also, from time to time, invest in high-quality corporate bonds in any of the major developed economy markets. In addition, the Fund may invest in currencies with the aim of improving potential returns and increasing diversification.
The Fund Manager aims to tap the multiple sources of potential return available in bond markets using a variety of strategies including:
· Active management of the Fund's duration
· The purchase of short- or long-dated bonds based on expectations of inflation and interest rate movements
· Investment in currencies expected to appreciate
· Asset allocation between different global bond markets
· Diversification into corporate bonds, which can offer higher yields in an attractive environment for risk.
Global bonds tend to offer the prospect of some capital returns, combined with steady income payments, provided inflation expectations remain moderate and interest rates do not rise sharply.
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Investec GS Global Bond comment - Jun 08
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Monday, 15 September 2008
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Fund Manager Comment
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The Global Bond Fund is able to invest across the full spectrum of quality fixed-income assets. It generally employs a conservative strategy, focusing on quality government bonds denominated in US dollars, yen, sterling and euro. However, it will also, from time to time, invest in high-quality corporate bonds in any of the major developed economy markets. In addition, the Fund may invest in currencies with the aim of improving potential returns and increasing diversification.
The Fund Manager aims to tap the multiple sources of potential return available in bond markets using a variety of strategies including:
_ active management of the Fund's duration;
_ the purchase of short- or long-dated bonds based on expectations of inflation and interest rate movements;
_ investment in currencies expected to appreciate;
_ asset allocation between different global bond markets;
_ diversification into corporate bonds, which can offer higher yields in an attractive environment for risk.
Global bonds tend to offer the prospect of some capital returns, combined with steady income payments,provided inflation expectations remain moderate and interest rates do not rise sharply.
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Investec GS Global Bond comment - Mar 05
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Wednesday, 22 June 2005
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Fund Manager Comment
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The Fund invests across the full spectrum of quality fixed income assets. It generally employs a conservative strategy, focusing on quality government bonds denominated in US dollars, yen, sterling and euro. However, when conditions are suitable, it will invest in high quality corporate bonds in any of the major developed world economies. The Fund also invests in currencies in order to improve its returns and reduce risk through diversification.
High quality bonds offer investors a relatively predictable income stream as well as the opportunity to build capital gradually over time. By spreading investments among countries at different stages of the economic and interest rate cycle, global bond investors can maximize diversification, reducing the likelihood that portfolio assets will all move in the same direction at once.
The quality of the Fund's investment team, combined with a rigorous investment process has earned it an A rating from Forsyth Partners.
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Investec GS Global Bond comment - Dec 04
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Friday, 28 January 2005
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Fund Manager Comment
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The Fund invests across the full spectrum of quality fixed income assets. It generally employs a conservative strategy, focusing on quality government bonds denominated in US dollars, yen, sterling and euro. However, when conditions are suitable, it will invest in high quality corporate bonds in any of the major developed world economies. The Fund also invests in currencies in order to improve its returns and reduce risk through diversification.
High quality bonds offer investors a relatively predictable income stream as well as the opportunity to build capital gradually over time. By spreading investments among countries at different stages of the economic and interest rate cycle, global bond investors can maximize diversification, reducing the likelihood that portfolio assets will all move in the same direction at once.
The quality of the Funds investment team, combined with a rigorous investment process has earned it an A rating from Forsyth Partners.
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Investec GS Global Bond comment - Sep 04
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Tuesday, 2 November 2004
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Fund Manager Comment
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The Fund is able to invest across the full spectrum of quality fixed income assets. It generally employs a conservative strategy, focusing on quality government bonds denominated in US dollars, yen, sterling and euro. However, it will also, from time to time, invest in high quality corporate bonds in any of the major developed economy markets. In addition, the Fund may invest in currencies in order to improve potential returns and increase diversification.
The manager generates returns in two ways: first through active management of the Fund's duration, buying short or long dated bonds based on expectations of inflation and interest rate movements and, secondly, through asset allocation between different global bond markets and types of bonds.
Moderate US employment growth has left investors somewhat divided about the outlook for the US economy and consequently, US interest rates. We believe that the economy will push through its current soft patch and return to a normal recovery pace of around 4% and that the US Fed will continue to raise rates at a measured pace. As such, quality bond markets are vulnerable to the risk of expectations of higher interest rates, which would cause government bond prices to fall. As a result, a small part of the portfolio is being held in short-dated, high quality corporate bonds to improve the Fund's yields and benefit from strengthening trading conditions.
The Fund's sensitivity to interest rates has also been reduced with a conservative, shorter duration position.
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Investec GS Global Bond comment - Dec 03
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Thursday, 12 February 2004
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Fund Manager Comment
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The Fund is able to invest across the full spectrum of quality fixed income assets. It tends to employ a conservative strategy, focused on quality government bonds denominated in US dollars, yen, sterling and euro. However, it is also able to buy high quality corporate bonds in any of the major developed economy bond markets. The Fund's investment in currencies is an additional source of both potential returns and diversification to reduce volatility.
The manager generates returns in two ways: first through an active duration strategy, buying short or long dated bonds based on expectations of inflation and interest rate movements, and second, through asset allocation between different global bond markets and types of bonds.
The improved economic outlook leaves quality bond markets vulnerable to expectations of higher interest rates, which could cause prices to fall. As a result, the Fund has made a selective investment in high quality corporate bonds to improve yields and benefit from strengthening trading conditions. It has reduced the fund's sensitivity to interest rates by taking an underweight duration position to cushion the impact of a potential retreat in government bonds.
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Investec GS Global Bond comment - Sep 03
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Thursday, 30 October 2003
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Fund Manager Comment
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The fund invests in high quality government and corporate bonds predominantly denominated in US dollars, yen, sterling and euro. The fund's investment in currencies is an additional source of potential returns and diversification to reduce volatility.
Bond prices and interest rates respond to economic and political developments as well as to changes in an industry's conditions or an individual company's financial situation. We assess all three influences when deciding the fund's assets. When interest rates rise, bond prices fall but the higher interest income gained from buying new bonds benefiting from the new rates has the potential to boost returns thereafter. The fund can also make money by adjusting the fund's duration - buying longer-term or shorter-term bonds according to inflation and interest rate expectations.
The economic outlook is mixed: structural problems likely to hinder long-term growth, such as indebted consumers and excess production capacity in the US and a rigid labour market and the restrictive Growth and Stability Act in Europe, remain unresolved. However, these have been offset in the near term by the combined stimulus of 13 rate cuts by the US Fed over the past two and a half years, a weak dollar and a $350bn tax cut package, which have begun to spur stronger growth in the US and other major economies. Signs of economic recovery have prompted a correction in bond markets, which had become overvalued after a strong run in the first half of the year. However, despite short-term negative sentiment, low inflation and a bias by central banks to cut or keep interest rates stable works in favour of quality bonds and, as relatively secure assets providing a fixed income, they remain an attractive long-term investment.
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Investec GS Global Bond comment - June 2003
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Tuesday, 12 August 2003
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Fund Manager Comment
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The fund invests in high quality government and corporate bonds predominantly denominated in US dollars, yen, sterling and euro. By investing across currencies the fund both gains diversification and the prospect of profiting from currency appreciation.
Companies issue bonds for many purposes, among them to finance expansion and investment. By investing in highly rated corporate bonds, the fund aims to participate in the fortunes of a dynamic mix of companies world-wide. Bonds can be more secure than shares, since as creditors, bond owners have a priority claim on a company's assets. Developed world government bonds provide stable income, secured by the state.
Bond prices and interest rates respond to economic and political developments as well as to changes in an industry's conditions or an individual company's financial situation. We assess all three influences when deciding the fund's assets. When interest rates rise, bond prices fall but the capital loss can be cushioned by higher interest income gained from buying new bonds benefiting from the new rates. The fund can also make money by adjusting the fund's duration - buying longer-term or shorter-term bonds according to inflation and interest rate expectations.
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Investec GS Global Bond comment - March 2003
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Thursday, 8 May 2003
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Fund Manager Comment
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The fund invests in high quality government and corporate bonds predominantly denominated in US dollars, yen, sterling and euro. By investing across currencies the fund both gains diversification and the prospect of profiting from currency appreciation.
Companies issue bonds for many purposes, among them to finance expansion and investment. By investing in highly rated corporate bonds, the fund aims to participate in the fortunes of a dynamic mix of companies world-wide. Bonds can be more secure than shares, since as creditors, bond owners have a priority claim on a company's assets. Developed world government bonds provide stable income, secured by the state.
Bond prices and interest rates respond to economic and political developments as well as to changes in an industry's or an individual company's financial situation. We assess all three influences when deciding the fund's assets. When interest rates rise, bond prices fall but the capital loss can be cushioned by higher interest income gained from buying new bonds benefiting from the new rates. The fund can also make money by adjusting the fund's duration - buying longer-term or shorter-term bonds according to inflation and interest rate expectations.
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Investec GS Global Bond comment - October 2002
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Monday, 25 November 2002
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Fund Manager Comment
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The Fund invests in high-grade government and non-government bonds in all major currencies. Performance comes from the overall movements in bond prices, currency or income from these investments. It also comes from the way in which the fund managers structure the portfolio in terms of duration and exposure to currencies. From time to time, credit (i.e. corporate and other non-government) bonds may be re-rated against government bonds. The fund managers will also seek to benefit from this. In running the Fund, the fund managers will seek to add value through active management. This involves the control of the Fund's duration and its exposure to different levels of credit risk. In determining duration and exposure to major bond markets, the fund managers take account of likely trends in economies. In stock selection the fund managers look for bonds that are too cheap relative to the issuer's fundamentals. The fund managers may hedge currency exposures. Investec has built a team of 22 fixed income managers, analysts and dealers who work closely together to implement a highly structured investment process. The team's expertise in managing global and specialist fixed income portfolios was recognised by International Money Marketing, who voted Investec Fixed Income Manager of the year in 2000.
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Investec GS Global Bond comment - September 2002
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Wednesday, 20 November 2002
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Fund Manager Comment
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The Fund invests in high-grade government and non-government bonds in all major currencies. Performance comes from the overall movements in bond prices, currency or income from these investments. It also comes from the way in which we structure the portfolio in terms of duration and exposure to currencies. From time to time, credit (i.e. corporate and other non-government) bonds may be re-rated against government bonds. We will also seek to benefit from this.
In running the Fund, we will seek to add value through active management. This involves the control of the Fund's duration and its exposure to different levels of credit risk. In determining duration and exposure to major bond markets, we take account of likely trends in economies. In stock selection we look for bonds that are too cheap relative to the issuer's fundamentals. We may hedge currency exposures.
Investec has built a team of 22 fixed income managers, analysts and dealers who work closely together to implement a highly structured investment process. The team's expertise in managing global and specialist fixed income portfolios was recognised by International Money Marketing, who voted Investec Fixed Income Manager of the year in 2000.
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Investec GS Global Bond comment - June 2002
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Monday, 9 September 2002
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Fund Manager Comment
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June was a positive month for government bonds as investors sought "safe haven" investments at a time of volatile stockmarkets and/or fretted about the outlook for the global economy. Yields on 30-year and two-year US Treasuries, for example, fell by 0.11% and 0.38% respectively. Corporate bonds, by contrast, generally performed poorly as a result of concerns over accounting by prominent US companies such as Worldcom. Falls in stockmarkets provided a new catalyst for weakness in the US Dollar, which fell by more than 5% against the Euro.
The Fund outperformed its benchmark by a substantial margin. This was in part because of its longer-than-benchmark duration, in part because it was overweight to US Treasuries and in part because its exposure to US Dollar assets was largely hedged back into the Euro. The Fund also benefited from its holdings of Polish bonds: against this, positions in non-government bonds detracted from performance. Your Adviser remains optimistic about the outlook for global bond markets. Consequently the Fund will probably retain longer-than-benchmark duration. It will also continue to remain underweight to the US Dollar. The overvaluation of this currency, and the magnitude of the US current account deficit, suggest that the US Dollar has further to fall over the medium term.
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Investec GS Global Bond comment (April 2002)
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Monday, 10 June 2002
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Media Comment
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During April, a number of economic indicators, both in the USA and elsewhere, were weaker than had been expected. As a consequence, yields fell on government bonds in all Western markets. Short-dated bonds tended to outperform as investors looked for a slower tightening in monetary policy by the major central banks than they had previously. Agency bonds, and other AAA rated non-government bonds outperformed US Treasuries. By contrast, more low rated corporate bonds suffered as a result of the volatility in global stockmarkets. Concerns over the prospects for the US economy contributed to the weakness in the US$ against other major currencies.
Two factors ensured that the Fund outperformed the benchmark by a substantial margin. First, the Fund's duration was significantly longer than that of the benchmark positioning it to benefit from the fall in yields; second, the Fund benefited from its exposure to the US Dollar at a time when the currency was relatively weak. By the end of the month, the Fund was heavily overweight the Euro.
Your Adviser anticipates that global bond markets will continue to rally, substantially because of bond valuations. The Fund will probably remain underweight to the US Dollar, which appears vulnerable to further weakness.
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Investec GS Global Bond comment - March 2002
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Tuesday, 14 May 2002
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Fund Manager Comment
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March was a difficult month for global bond investors. Yields on 10-Year US Treasuries rose by 0.51% to 5.47%. Yields on 10-year bonds in Europe rose by around 0.3%. Yields on shorter-dated bonds rose even more sharply. These moves were a response to the mounting signs of economic recovery in the USA, and growing consumer and business confidence in Europe. Investors shifted capital away from "safe haven" assets such as government bonds and into riskier areas. Quality corporate bonds, with comparatively low A and BBB ratings outperformed. The major currencies traded in tight bands relative to each other.
The Fund underperformed the benchmark index through the month. This was because it had had longer-than-benchmark duration. Your Adviser cut the Fund’s duration as the prices of bonds fell. However, towards the end of March, the Fund’s duration was increased once more. The Fund was helped by its exposure to the A$, the NZ$ and the Swedish Krona, which outperformed.
In anticipation of a gradual economic recovery, your Adviser has bought lower rated corporate bonds for the Fund. Your Adviser considers that government bonds have been oversold and should rally in price, particularly in the USA. The Fund’s positioning reflects this.
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