October, 2023
• In October, the Fund underperformed its benchmark.
• Sector/security selection positioning detracted from relative performance. Our short corporate investment-grade positions, particularly on the US side, detracted. A long position in Australian local government regional bonds also dampened performance in October. Meanwhile, eurozone covered bonds performed well for us, helping to drive performance.
• Currency positioning did not materially impact relative performance
September, 2023
• In September, the Fund underperformed its benchmark.
• Country/yield curve positioning benefitted relative performance.
• Sector/security selection positioning benefited relative performance. Selections in European investment-grade corporates contributed. Allocation in high-yield corporates also boosted returns, driven by communications names in Europe as spreads tightened over the month.
• Currency positioning did not materially impact performance.
August, 2023
• In August, the Fund underperformed its benchmark.
• Country/yield curve positioning benefitted relative performance
• Our position in Australia contributed, especially with our exposure in the two- to 10-year part of the curve where rates rallied the most.
• Sector/security selection positioning did not materially impact relative performance
July, 2023
• In July, the Fund outperformed its benchmark.
• Sector/security selection benefitted relative performance. Our exposure to investment- grade securities added to returns as spreads tightened over the period, notably in banking sector.
• Country/yield-curve positioning boosted returns.
June, 2023
• In June, the Fund underperformed its benchmark after fees.
• Country/yield-curve positioning hurt relative performance.
• Our exposure to Australian rates also negatively impacted the performance as yields rose all along the curve.
• Our exposure to investment- grade securities added to returns as spreads tightened over the period.
• Exposure to non-investment grade securities was also positive.
April, 2023
• In April, the Fund outperformed its benchmark. Sector/security selection added to relative performance. Our election in EUR dominated investment-grade securities benefited returns as spreads tightened over the period, notably in the financial sector.
• The Fund’s long to Australian rates detracted as yield rose during the month. Currency positioning was negative.
• Currency positioning did not materially impact relative performance and there were no positions of note.
• In April, we also reduced our allocation to high-yield corporate bonds as we sold some banking and consumer non-cyclical credit in the BB tranche of the credit rating spectrum.
March, 2023
Fund Performance:
• In March, the Fund outperformed its benchmark.
• Country/yield-curve positioning boosted returns. The Fund’s long to Australian and British bonds benefited performance as yields went down in March.
• Sector/security selection hurt performance. Our exposure to investment- grade securities detracted performance as selections in banking names detracted in the wake of several high-profile bank failures in the US and the acquisition of Credit Suisse by UBS in Europe.
• Currency positioning was negative.
February, 2023
Fund Performance
• In February, the Fund underperformed its benchmark. Country/ yield-curve positioning hurt performance. The Fund’s long to US, UK, Australia and New Zealand detracted as rates rose in February.
• Sector/security selection did not materially impact returns. An exposure to inflation- linked securities boosted returns as frontend breakevens moved about 100 basis points (b.p.) higher due to persistent core inflation.
• Currency positioning did not materially impact relative performance and there were no positions of note.
Fund Strategy
• In the UK, we increased our long position by adding some Gilt futures and went from a short to a long position in the 10-year portion of the yield curve.
• High-yield corporate bonds represent less than 5% of the Fund’s total assets. We trimmed some utility and communications names like Northumbrian Water, Netflix or United Group
January, 2023
• In January, the Fund outperformed its benchmark. Sector/ security selection boosted returns. Our exposure to high yield and investment grade corporates spaces benefited performance.
• Country/yield-curve positioning benefited performance.
• Currency positioning was negative. Portions of our currency strategy offset some contribution, particularly shorts in the Chilean peso as well as longs to the Norwegian krone, Canadian dollar, Swedish krona and Peruvian sol.
December, 2022
• In December, the Fund underperformed its benchmark. Country/ yield-curve positioning hurt returns. The Fund’s long to Australia detracted as yields went up over the month. A long to the eurozone also detracted, especially our long positions to France and Spain where yields have increased.
• Portions of our currency strategy offset some contribution, particularly longs in the Canadian and US dollar as well as shorts to Singapore dollar, Japanese yen and Korean won.
• Sector/security selection boosted returns. Our exposure to high yield and investment grade corporates spaces benefited performance. Exposure to UK corporates benefited performance as the sell-off in UK markets last quarter caused the same companies to be cheap due to selling pressure.
November, 2022
In November, the Fund generated positive absolute returns and outperformed its benchmark. Sector/security selection boosted returns. Our exposure to high yield and investment grade corporates spaces benefited performance as lower quality outperformed and we hold a higher allocation to BBBs corporates.
Our positioning within emerging-market (EM) corporates benefited from a strong recovery as the US dollar declined Meanwhile, exposure to US Treasury inflation-protected securities detracted as inflation expectation subsided after a lower-than-expected inflation print in the US.
Country/yield-curve positioning also contributed to the overall performance.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/Monthly-Fact-Sheet-1.pdfOctober, 2022
• In October, the Fund generated positive returns and outperformed its benchmark. Sector/security selection boosted returns. Our exposure to investment grade and high yield corporates spaces benefited performance.
• Country/yield-curve positioning also contributed to the overall performance. The Fund’s long to the UK contributed as yield felt after the new Prime Minister Rishi Sunak restored credibility in UK fiscal policy.
• Currency positioning was negative. Portions of our currency strategy offset some contribution, particularly longs in the US dollar, Brazilian real, Japanese yen and short in the British pound. Tactical positioning in the Eurozone detracted over the period.
September, 2022
In September, the Fund generated negative returns and underperformed its benchmark. Country/yield- curve positioning hurt returns. The position in the US detracted as rates increased more than other countries.
Our long to European rates via Germany also detracted as rates rose on continued natural gas led inflationary pressures.
Sector/security selection was negative. Our exposure to investment grade and high yield corporates detracted as risk off sentiment took hold. Our exposure to US Treasury inflationprotected securities (TIPS) also weighed on returns as breakevens narrowed, but this was somewhat offset with inflation accruals.
Currency positioning hampered performance. However, portions of our currency strategy helped to offset some detraction, particularly longs in the Indian rupee and Japanese yen.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/192122814.pdfAugust, 2022
• In August, the Fund underperformed its benchmark. Country/ yield-curve positioning hampered returns. The Fund’s exposure in Australia and the US detracted as rates increased over the month.
• Our long to European rates via Germany detracted as rates rose on heightened inflationary pressures.
• Our exposure to the UK was a negative as the UK market sold-off in response to increased inflation expectations and uncertainty on policy response as well as political uncertainty in advance of the elections.
• Sector/security selection was positive. Our exposure to European high yield corporates contributed in August as spreads tightened. Our exposure to credit risk-transfer securities (CRTs) also contributed.
• Currency positioning also contributed to the performance.
• An overweight to the US dollar, Mexican peso, and Japanese yen contributed.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/190937625.pdfJuly, 2022
• In July, the Fund outperformed its benchmark. Country/yieldcurve positioning boosted returns. The Fund’s exposure in Australia was positive as Australian yields fell over the month. Our long US position contributed in July as 10-year yields ended the period down 37 basis points (b.p.) to 2.65% with yields falling across most other maturities as well.
• Meanwhile, our German position detracted, offsetting these gains somewhat. Our positioning in Japanese fixed income was also negative over the month.
• Sector/security selection was positive. Our exposure to credit risk was rewarded sharply in July as spreads tightened. Exposure to investment-grade and high-yield corporates contributed sharply as well as exposure to credit risk-transfer securities.
• Currency positioning also contributed to the performance.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/190071045.pdfJune, 2022
In June, the Fund underperformed its benchmark. Sector/security selection weighed on performance. Our overweight to US and European corporates was a sharp detractor as credit delivered negative excess returns over the month. Yield-curve positioning in the eurozone was negative as yields rose across the currency bloc. Our allocations to emerging markets also hampered returns during the month.
• Country/yield-curve positioning was also negative. The Fund’s exposure in Australia was negative, particularly in the ten- year part of the curve, detracting as yields continue to rise. • Currency positioning was positive. An underweight to the Chilean peso, along with overweights to the Chinese renminbi, Indian rupee, and Singaporean dollar contributed.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/189202499.pdfMay, 2022
In May, the Fund underperformed its benchmark. Sector/security selection weighed on performance. Yield-curve positioning in the eurozone detracted as yields rose across the board. The European Central Bank (ECB) has become more hawkish and is signaling a potential rate hike in July and September.
• Country/yield-curve positioning did not materially impact relative performance. The Fund’s exposure in Australia was negative as our overweight, particularly in the ten-year part of the curve, detracted as yields continue to rise.
• Currency positioning was positive. Overweight to LATAM currencies such as the Brazilian real and Chilean peso, along with an underweight to the Indonesian rupiah contributed.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/188153410.pdfApril, 2022
The AB Dynamic Global Fixed Income Fund (the “Fund”) aims to achieve returns that exceed the Bloomberg Ausbond Bank Bill Index after fees over 5 year periods.
In April, the Fund underperformed its benchmark. Country/yieldcurve positioning was the largest detractor from performance this month. The Fund’s exposure in Australia detracted as yields continue to rise. The Reserve Bank of Australia (RBA) hiked rates 25 basis points (b.p.) on May 3 and flagged more hikes to come. + Sector/security selection weighed on performance. Yield-curve positioning in the eurozone detracted as yields rose across the board. The European Central Bank (ECB) has become more hawkish and is signaling a potential rate hike in July.
+ Currency positioning was positive, as our overweight positions in US dollar, Singaporean dollar, Indonesian rupiah and Swiss franc contributed as the currencies posted positive returns over the period.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/187297822.pdfMarch, 2022
The AB Dynamic Global Fixed Income Fund (the “Fund”) aims to achieve returns that exceed the Bloomberg Ausbond Bank Bill The index after fees over 5-year periods.
+ In March, the Fund underperformed its benchmark. Country/ yield-curve positioning was the largest detractor from performance this month. The Fund’s exposure in Australia was negative as 10-year yields rose 70 basis points (b.p.) due to the easing of pandemic restrictions and flooding in major agricultural regions. The US Treasury yield curve initially steepened as two-year US Treasuries rose faster than longer-term US government bonds as anticipated hikes were priced in—and then the yield curve flattened.
+ Sector/security selection contributed as our overweight to investment-grade and high-yield credit was positive. Although corporate credit sector returns were negatively affected by rising rates, spreads rebounded and tightened in March from their more stressed levels in February.
+ Currency positioning was also additive, as our short positions in British pound and Swiss franc contributed as the currencies posted negative returns over the period.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/186285833.pdfJanuary, 2022
+ In January, the Fund underperformed its benchmark. Country/ yield-curve positioning was the largest detractor from performance this month. The Fund’s exposure in Australia was negative as yields followed the global trend and rose in January. The Reserve Bank of Australia (RBA) met on February 1, keeping interest rates unchanged and announced that the RBA will cease its bond-buying program on February 10.
+ Sector/security selection was negative overall. Exposure to investment-grade and high-yield credit detracted as corporate credit sectors were not immune from the broader market price volatility during the period. Investment-grade corporate bonds fell and underperformed global treasuries, particularly in the US.
+ Currency positioning detracted. However, exposure to selected emerging market (EM) currencies like the South African rand, Mexican peso, Indonesian rupiah and Polish zloty in particular, helped as those currencies performed well over the period.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/183814748.pdfDecember, 2021
In December, the Fund outperformed its benchmark. Sector/ security selection was the largest contributor from performance this month. The Fund’s exposure to investment-grade and high-yield credit contributed. Investment-grade corporates rose modestly in the eurozone and significantly outperformed the return of eurozone treasuries.
+ Country/yield-curve positioning was negative overall. Exposure in Canada was additive. While major DM government bond yields rose in December, Canada was the exception as rates fell as the Bank of Canada (BoC) kept rates on hold, pushing out guidance on a hike longer than expected and renewed lockdown measures in response to the omicron variant.
+ Exposure in the US was negative as yields rose, led by the Fed announcing a substantial shift in policy, reducing each month’s bond purchases, starting in mid-January, and projecting three rate hike increases in 2022. Exposure in the UK detracted as yields rose after the Bank of England (BoE)’s rate hike. + Currency positioning did not materially impact relative performance
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/182549605.pdfNovember, 2021
In November, the Fund marginally underperformed its benchmark, after fees. + Country/yield-curve positioning was the largest contributor from performance this month and exposure in Australia was the biggest contributor.
+ Currency positioning detracted. Exposure to the Indian rupee was positive as the currency posted positive returns over the month. Exposure to the Taiwan dollar weighed on returns as the currency posted negative returns in November.
+ Sector/security selection was negative overall. Exposure to investment-grade and high-yield credit detracted as credit sector relative returns were challenged with global developedmarket (DM) investment-grade corporate bonds rising slightly and trailing global treasuries. Our emerging-markets (EM) sovereign exposure was negative as EM hard-currency sovereign bonds fell sharply due to investor sentiment
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/181794704.pdfOctober, 2021
+ In October, the Fund underperformed its benchmark. Country/ yield-curve positioning was the largest detractor from performance this month. The Fund’s exposure in Australia detracted over the period as three-year yields rose from 0.20% to 1.20% from mid-September to end of October.
Exposure to Brazil had a negative impact on performance over the month as yields sold off after the central bank hiked rates, stepping up its battle against a deteriorating inflation outlook. Exposure to the US detracted as yields rose over the month. Developed-market (DM) government bond yields in October increased across major markets inside of 10 years, and curves flattened as longer-dated yields declined or lagged. The front end was most impacted as investors became more hawkish and brought forward yields in anticipation of interest-rate hikes by central banks. Exposure in New Zealand weighed on returns as yields followed the global trend and rose over the month.
+ Sector/security selection was negative overall. The Fund’s short position in the US dollar added to performance as the currency underperformed most of the major currencies over the month. Exposure to inflation-linked bonds contributed as Australian breakevens widened over the month. Exposure to credit risk-transfer securities (CRTs) was a contributor as spreads generally continued to tighten for higher-rated tranches. CRTs are benefiting from an investor drive to diversify holdings while tapping into strong fundamentals and the recovery of the US housing market.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/180898872.pdfSeptember, 2021
The AB Dynamic Global Fixed Income Fund (the “Fund”) aims to achieve returns that exceed the Bloomberg Ausbond Bank Bill Index after fees over 5 year periods.
FUND REVIEW
+ In September, the Fund underperformed its benchmark. Country/yield-curve positioning was negative overall. Exposure to Australia hampered returns the most. Over the period yields rose in anticipation of the easing of the lockdown restrictions. Investors also digested comments by several DM central bank members who suggested that the timeline for shortterm interest-rate hikes may be accelerated. Exposure to the US detracted as yields rose over the month amid the US Federal Reserve’s (the Fed’s) tapering discussions and rising concerns about inflation which outweighed signs of moderating global growth. Exposure to Brazil had a negative impact on performance over the month as the yields sold off.
+ Sector/security selection was the largest contributor this month, mainly due to allocation to corporate credits. Developed-market (DM) high-yield corporate bonds had positive results in a risk-on environment and from continued appetite for higher-yielding assets by investors. Exposure to inflation-linked bonds and credit risk–transfer securities (CTRs) were also contributors.
FUND STRATEGY + Within our investment-grade corporate bond exposure, our allocation is mostly balanced between the US and Europe in BBB-rated investment-grade bonds. We continue to prefer eurozone credit opportunities that should continue to benefit from the ECB’s significant Pandemic Emergency Purchase Programme (PEPP) bond purchases relative to the Fed’s program
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/180213256.pdfAugust, 2021
In August, the Fund outperformed its benchmark. Sector/ security selection was the largest contributor this month, mainly due to allocation to corporate credits. Developed-market (DM) high-yield corporate bonds had positive results in a risk-on environment and from continued appetite for higher-yielding assets by investors. Exposure to inflation-linked bonds and hard currency emerging-market (EM) sovereigns and corporates were also additive.
+ Country/yield-curve positioning was negative overall. Exposure to Brazil hampered returns the most. Exposure to the US also detracted as yields rose as investors looked beyond the nearterm impact of the coronavirus delta variant and focused on tapering guidance. Exposure in Australia contributed amid the continued rally in yields, driven by the dovish Reserve Bank of Australia (RBA) which seems likely to hold the monetary-policy line by not adjusting rates until well into 2024.
+ Currency positioning was also a detractor, with short positions in the yen and Brazilian real having a negative impact on performance over the month
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/178862889.pdfJuly, 2021
+ In July, the Fund outperformed its benchmark. Country/yieldcurve positioning drove the relative outperformance. Positioning in Australia was the biggest contributor, driven by the strong rally in yields and the renewed lockdowns that have clouded the economic recovery over the near term. Our exposure in the US also added, as interest rates continued to fall across developed markets (DM) and central bankers reinforced the notion that short-term rates will remain anchored for the foreseeable future. Offsetting this somewhat was our exposure in Brazil, which detracted.
+ Sector/security selection was also additive. Exposure to inflation-linked bonds contributed; even as rates declined, growth indicators came in strong and inflation prints were high. Our allocation to investment-grade credit further helped, as investment-grade technicals remained supportive, particularly in Europe. Exposure to credit risk–transfer securities (CRTs) was positive, as CRTs experienced solid performance on the strength of the US housing market. Our exposure to hard-currency emerging-market (EM) sovereign and corporates detracted, as they underperformed DM counterparts.
+ Currency positioning contributed, especially our short position in the Brazilian real and long in the Canadian dollar. Short positions in the US dollar, yen and Swiss franc detracted.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/175673115.pdfJune, 2021
In June, the Fund outperformed its benchmark.
The Fund’s sector/security selection drove the relative outperformance. Our allocation to investment-grade credit was additive as investment-grade technicals remained supportive. An allocation to high-yield credit also helped, with high-yield corporate bonds providing strong returns. Exposure to credit risk–transfer securities (CRTs) contributed, driven by a negative net supply technical, rate stability, strong performance in risk assets and continuously improving fundamentals. Our exposure to emerging-markets (EM) hard-currency corporates further added, as they outperformed developed-market (DM) treasuries.
+ Currency decisions were positive for returns, helped by long positions in the Russian ruble and Chinese yuan. Offsetting this somewhat were our short positions in the Brazilian real and Mexican peso, which detracted.
+ Country/yield-curve positioning did not have a significant impact on overall performance, but there were some positions of note. Our exposure in Australia contributed as rates rallied. Long positions in US and Canadian securities detracted as yields in the short end of the curve rose. FUND STRATEGY + Over the period, we maintained the overall balance of our Fund risk. Within our investment-grade corporate credit exposure, our allocation is mostly balanced between the US and Europe
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/174255457.pdfMay, 2021
In May, the Fund outperformed its benchmark. The Fund’s sector/security selection contributed most to relative outperformance. Our allocation to investment-grade credit was additive as investment-grade technicals remained supportive. Exposure to eurozone inflation-linked securities contributed as breakevens continued to widen. Our exposure to credit risk–transfer securities (CRTs) further added to returns amid the continued positive trend in the US housing market which is benefiting from strong technicals.
+ Country/yield-curve positioning also contributed. Our exposure in Australia had a positive effect as rates rallied. The Fund’s long position to the US contributed, as US Treasury returns were positive over the month. Our long position in Mexican securities also added as yields fell over the month.
+ Currency decisions further added to relative performance. Our long positions in the Russian ruble and offshore Chinese renminbi helped during the month. Offsetting this somewhat were our short positions in the South African rand, Swiss franc and US dollar.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/172966414.pdfDecember, 2020
In December, the Fund outperformed it's benchmark. Sector/ security selection contributed most to relative outperformance, largely the result of allocations to investment-grade and high-yield corporates in the US and eurozone. Exposure to US commercial mortgage-backed securities (CMBS) and quasi-sovereigns also added. Currency decisions were positive. Our long emerging-markets (EM) position versus our short US dollar position contributed, as the greenback fell against most EM currencies and all developed-market (DM) currencies. Country/yield-curve positioning detracted, hurt most by our long positions in Australian and US duration, as US and Australian treasury returns were negative. Yield curves steepened, prompted by the vaccine- and stimulus-fuelled reflation trade.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/163537648.pdfasset_class: Fixed Income
asset_category: Multi-Strategy Income
peer_benchmark: Fixed Income - Multi-Strat Income Index
broad_market_index: Global Aggregate Hdg Index
manager_contact_details: Array
ticker: ACM0001AU
release_schedule: Monthly
commentary_block: Array
factsheet_url:
https://web.alliancebernstein.com/funds/au/fixed-income/dynamic-global-fixed-income.htm
Fund Literature => Fund Materials => Monthly Factsheet
or try the direct link below:
https://web.alliancebernstein.com/investments/au/funds/rsb/DG/Monthly%20Fact%20Sheet.pdf
fund_features:
The AB Dynamic Global Fixed Income Fund aims to achieve returns that exceed the those of Bloomberg AusBond Bank Bill Index, after fees, over five-year periods. The Fund is designed for investors with higher risk tolerances who want to achieve income returns exceeding those of Australian bank bill rates over the long term by investing in global debt or fixed-income securities.
- The Fund implements a global, multi-sector strategy, investing in a broad range of debt securities. The Fund may hold corporate bonds, government bonds, asset-backed securities, mortgage-backed securities, closed-ended mutual funds (up to 5% of the Fund’s assets) and bank loans located anywhere in the world, including developed and emerging countries.
- Up to 40% of the Fund’s assets may be high risk and rated below investment grade.
- The Fund seeks to control risks and enhance returns through currency management.
- The Fund intends to hedge to Australian dollars most of the foreign currency exposures of its debt and fixed-income securities.
- Derivatives may be used to manage risk exposures, invest cash, and gain or reduce investment exposures. Derivatives will not be used for leveraging or gearing purposes.
structure: Managed Fund