February, 2023
Over the month, Capital Group Global Corporate Bond Fund Hedged (AU) returned -2.8%1 before fees, while the index returned -2.7%2 . Net of fees the fund returned -2.8%3 . For the 12-month period, the fund returned -10.2%1 before fees, and -10.7% after fees3 , compared to the index’s return of -10.8%2 .
• Curve positioning had the largest negative impact on relative results. In contrast, duration positioning and sector/industry allocation made small positive contributions, while security selection had a neutral impact on a relative basis.
• The choice of issuers in the banking sector weighed on relative returns. Above-index holdings in Credit Suisse, Morgan Stanley, HSBC, SVB Financial and Royal Bank of Canada were among the largest detractors, as was a below-index exposure to Wells Fargo. However, above-index positions in Australia and New Zealand Banking Group and BPCE and a below-index holding in JPMorgan Chase were helpful.
• Security selection in the basic industry sector also detracted on a relative basis. An above-index holding in International Flavors and Fragrances was a key detractor here.
• Conversely, the choice of issuers and a below-index position in the consumer non-cyclical sector added relative value. In particular, a below-index exposure to AbbVie helped lift returns on a relative basis.
• The selection of issuers in the communications sector also buoyed relative results. A below-index holding in AT&T was among the largest contributors at an issuer level.
January, 2023
• Over the month, Capital Group Global Corporate Bond Fund Hedged (AU) returned 3.5%1 before fees, while the index returned 3.2%2 . Net of fees the fund returned 3.5%3 . For the 12-month period, the fund returned -9.5%1 before fees, and -10.0% after fees3 , compared to the index’s return of -10.2%2 .
• Security selection contributed the most to relative results, with duration and curve positioning also helping, albeit to a lesser extent. Sector/industry positioning weighed on returns on a relative basis.
• Security selection in the banking sector added value on a relative basis. At an issuer level, overweight positions in HSBC, Credit Suisse, BNP Paribas, SVB Financial, Australia and New Zealand Banking Group, Intesa Sanpaolo and CaixaBank contributed the most, although underweight holdings in JPMorgan Chase, Goldman Sachs and Bank of America detracted, as did having no exposure to Citigroup and Barclays.
• The choice of issuers in the consumer cyclical sector also helped relative returns. In particular, an overweight holding in Stellantis Finance was beneficial.
• Conversely, the choice of issuers in the energy sector detracted from relative results. Not holding bonds issued by Energy Transfer proved costly, as did an overweight holding in bonds issued by ExxonMobil.
• Not holding Aroundtown weighed on relative results in the other investment-grade corporates sector. The portfolio’s holding of cash also dragged on relative returns given the rally in bond markets.
December, 2022
• For the three months ended 31 December 2022, Capital Group Global Corporate Bond Fund Hedged (AU) returned 3.1%1 before fees, while the index returned 2.7%2 . Net of fees, the fund returned 3.0%3 . Over the oneyear period, the portfolio returned -14.8%1 before fees and -15.3%3 after fees. The index returned -15.4%2 over the one-year period.
• Security selection was the biggest contributor to fund results, adding 62 bps to gross excess returns. These gains were partially offset by losses from sector/industry selection, which cost 17 bps of relative returns.
• Security selection within the banking sector was the largest overall contributor, in particular HSBC, which made the highest contribution to returns for the fund. HSBC’s bonds benefitted from an easing of COVID restrictions in China, which helped to significantly reduce some of the key tail risks that were facing the bank. However, the strength of the banking sector over the quarter meant that relative results were negatively impacted by underweight positions in the sector, with a below-index weight in Citigroup the largest overall detractor. Other bank underweights that detracted included Barclays, Bank of America and JPMorgan Chase.
• Security selection in the Electric sector was a further contributor to fund returns. This included overweight positions in Pacific Gas and Electric (PG&E) and Edison International, which have both continued to do well in these uncertain times. Bonds from both companies were within the top 5 contributors to portfolio returns by issuer.
• Security selection and an overweight to the consumer cyclical sector benefitted relative returns. The largest contribution was the fund’s non-index position in Netflix. The company once again beat market expectations in its third-quarter earnings release.
• The largest detractor from fund relative returns at a sector level were holdings in the Treasury market, which were impacted by tightening credit spreads.
November, 2022
• Over the month, Capital Group Global Corporate Bond Fund Hedged (AU) returned 4.3%1 before fees, while the index returned 4.1%2 . Net of fees the fund returned 4.2%3 . For the 12-month period, the fund returned -14.4%1 before fees, and -14.9% after fees3 , compared to the index’s return of -14.9%2 .
• Security selection was the biggest contributor to relative returns over November. Duration and curve positioning also added value to a lesser extent. In contrast, sector/industry allocation detracted from returns on a relative basis.
• Security selection and, to a lesser extent, a below-index holding in the banking sector lifted relative returns. Above-index holdings in HSBC, NatWest Group and CaixaBank were among the largest contributors at an issuer level, although below-index positions in Bank of America, Goldman Sachs and JPMorgan Chase were among the largest detractors.
• The choice of issuers in the consumer non-cyclical sector also boosted results on a relative basis. In particular, overweight holdings in Philip Morris International and BAT Capital were helpful, as was a non-index holding in British American Tobacco. • Conversely, the selection of bonds in the communications and energy sectors had a negative impact on relative results. • The portfolio’s cash holdings also weighed on returns on a relative basis.
October, 2022
• Over the month, Capital Group Global Corporate Bond Fund Hedged (AU) returned -0.5%1 before fees, while the index returned -0.6%2 . Net of fees the fund returned -0.6%3 . For the 12-month period, the fund returned -17.9%1 before fees, and -18.4% after fees3 , compared to the index’s return of -18.1%2 .
• Security selection was the biggest contributor to relative returns over October. Duration and curve positioning were slightly negative, as was sector/industry allocation on a relative basis.
• An underweight position in the other investment-grade corporate sector was helpful for relative results, with security selection adding value to a lesser extent.
• The choice of issuers in the electric sector boosted returns on a relative basis. Overweight positions in Pacific Gas and Electric and Edison International were among the largest contributors at an issuer level.
• Conversely, both an underweight position and security selection in the consumer non-cyclical sector weighed on relative results.
• The banking sector was an area of relative weakness, with overweight holdings in NatWest Group and SVB Financial Group among the largest detractors. However, an underweight exposure to the sector did mitigate some of the negative impacts.
September, 2022
• For the three months ended 30 September 2022, Capital Group Global Corporate Bond Fund Hedged (AU) returned -4.7%1 before fees, while the index returned -4.8%2 . Net of fees, the fund returned -4.8%3 . Over the one-year period, the portfolio returned -17.4%1 before fees and -17.9%3 after fees. The index returned -17.7%2 over the one-year period.
• Security selection had a beneficial impact on relative results, but sector/industry selection detracted. The portfolio’s duration exposure also weighed on relative returns, while curve positioning was marginally positive.
• Security selection within the banking sector was detrimental to relative returns, especially overweight positions in Credit Suisse and HSBC, though an underweight to the sector helped slightly. Credit Suisse continued to suffer on the back of negative news headlines. It failed to reassure investors about the strength of its balance sheet. Bond prices dropped to record lows over the quarter, reflecting concerns about the company’s restructuring programme. Credit default swaps also spiked, meaning the cost of buying insurance against it defaulting on its debt soared to record highs. Spreads for the banking sector in general have been trading wide. Banks are inherently confidence-sensitive levered institutions that in the current market environment and backdrop could tend to underperform the broad index during risk-off periods. In our opinion, HSBC remains a solid bank with operations in both the UK and Hong Kong. Business risks appear manageable even in a recessionary scenario thanks to strong long underwriting processes, rising rates, strong capital and excellent liquidity.
• Security selection in the insurance sector detracted, particularly an overweight holding in Zurich Insurance Group. It’s been a difficult year for insurers who have continued to face losses and have also suffered on the back of worldwide economic uncertainty.
• Security selection in the communications sector benefitted relative returns. A non-index position in Netflix was the portfolio’s largest positive contributor at an issuer level. The company lost less subscribers than anticipated during the second quarter, projected a rapid return to growth and grew its market share.
August, 2022
Over the month, Capital Group Global Corporate Bond Fund Hedged (AU) returned -3.1%1 before fees, while the index returned -3.2%2 . Net of fees the fund returned -3.2%3 . For the 12-month period, the fund returned -14.0%1 before fees, and -14.5% after fees3 , compared to the index’s return of -14.3%2 .
• Curve positioning weighed on relative results, with security selection also detracting slightly. Sector/industry allocation added to relative value modestly, while duration positioning had a neutral impact on a relative basis.
• Security selection in the insurance sector weighed on relative results, although an above-index exposure was slightly helpful on a relative basis. At an issuer level, an above-index holding in AXA was among the largest relative detractors.
• The choice of issuers among communications companies had a negative impact on relative returns. An aboveindex position in Magallanes was a key relative detractor at an issuer level.
• Conversely, the choice of issuers in the consumer non-cyclical sector had a positive impact on relative results. In particular, an above-index holding in BAT Capital was among the largest relative contributors at an issuer level.
• An above-index allocation to emerging market corporate bonds was beneficial to relative returns. At an issuer level, a non-index position in ENN Clean Energy and an above-index holding in Bangkok Bank boosted returns on a relative basis.
July, 2022
Over the month, Capital Group Global Corporate Bond Fund Hedged (AU) returned 3.3%1 before fees, in line with the index2
Net of fees the fund returned 3.3%3 . For the 12-month period, the fund returned -11.4%1 before fees, and -12.0% after fees3 , compared to the index’s return of -11.7%2 . • Security selection had the largest positive impact on relative results, with curve positioning providing a more modest uplift on a relative basis. Meanwhile, sector/industry allocation was the largest relative detractor. The portfolio’s short duration positioning was also a drag on relative returns given the rally in global bonds over July.
The choice of issuers in the communications sector had a positive impact on relative results. In particular, a non-index holding in Netflix was among the largest contributors at an issuer level. • The choice of securities in the capital goods sector lifted relative returns. At an issuer level, above-index positions in Boeing, General Electric and Raytheon Technologies helped to boost returns on a relative basis
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/Commentary-CGGCBHAU-m-11.pdfMay, 2022
Over the month, Capital Group Global Corporate Bond Fund Hedged (AU) returned 0.0%1 before fees, while the index returned 0.1%2 . Net of fees, returns were also flat3 . For the 12-month period, the fund returned -9.4%1 before fees, and -9.9% after fees3 , compared to the index’s return of -9.8%2 . • In a period of heightened volatility, the valuations impact was the largest detractor from relative returns. Curve positioning also weighed on relative results, while security selection and duration positioning had the largest positive effects on a relative basis. Sector/industry positioning was also a slight positive.
• The choice of issuers and, to a lesser extent, a below-index holding in the consumer non-cyclical sector detracted from relative results. In particular, overweight positions in Philip Morris International and Altria hurt returns on a relative basis, as did having no exposure to AbbVie. • The choice of securities in the technology sector also weighed on relative results, although the portfolio’s overweight holding in the sector was a slight positive. An overweight holding in Apple detracted from relative returns at the issuer level.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/Commentary-CGGCBHAU-m-9.pdfApril, 2022
• Over the month, Capital Group Global Corporate Bond Fund Hedged (AU) returned -4.6%1 before fees, while the index returned -4.5%2 . Net of fees, the fund returned -4.7%3 . For the 12-month period, the fund returned -9.2%1 before fees, and -9.7% after fees3 , compared to the index’s return of -9.5%2 . • Security selection made the largest negative contribution to relative results during the month, with duration positioning having a more modest negative impact on a relative basis. Sector/industry positioning added value to relative results, while curve positioning had a small positive impact
• The choice of issuers in the banking sector detracted from relative results. In particular, an overweight position in Goldman Sachs hurt returns on a relative basis. # • The choice of securities in the communications sector also weighed on relative results. A non-index position in Netflix was the largest detractor from relative returns at the issuer level. • Conversely, an overweight position in emerging markets added value on a relative basis. At an issuer level, a position in Bangkok Bank added value on a relative basis.
• An underweight position in the consumer non-cyclical sector also helped relative returns. At an issuer level, not holding AbbVie was beneficial. The portfolio’s cash holdings also supported relative returns.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/Commentary-CGGCBHAU-m-8.pdfFebruary, 2022
• Over the month, Capital Group Global Corporate Bond Fund Hedged (AU) returned -2.0%1 before fees, while the index returned -2.1%2. Net of fees, the fund returned -2.0%3. For the 12-month period, the fund returned - 3.2%1 before fees, and -3.8% after fees3, compared to the index’s return of -3.5%2.
• Security selection and sector/industry positioning made a positive contribution to relative results during the month. Meanwhile, duration positioning added value on a relative basis, as did curve positioning, albeit to a lesser degree. In a period of heightened volatility, the impact of the valuation detracted from relative returns.
• Security selection in emerging markets helped relative returns, though its contribution was moderated to an extent by the portfolio’s overweight position in the sector. At the issuer level, not holding LUKOIL was beneficial.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/Commentary-CGGCBHAU-m-7.pdfJanuary, 2022
• Over the month, Capital Group Global Corporate Bond Fund Hedged (AU) returned -2.6% before fees, while the index returned -2.7% Net of fees, the fund returned -2.6% . For the 12-month period, the fund returned - 2.7% before fees, and -3.2% after fees3 , compared to the index’s return of -2.9% .
• Security selection made a negative contribution to relative results during the month, while sector/industry positioning made a small positive contribution. Meanwhile, duration positioning added value on a relative basis, while curve positioning had a neutral impact.
• Security selection in emerging markets contributed positively to relative returns, as did an overweight position in the sector, albeit it a lesser degree. At an issuer level, not holding Country Garden Holdings added value on a relative basis.
• An underweight position and stock selection in the consumer non-cyclical sector also helped relative returns. At an issuer level, not holding AbbVie was beneficial.
• Conversely, the choice of issuers in – and to a lesser extent an underweight position in – the banking sector detracted from relative results. In particular, an overweight position in Goldman Sachs hurt returns on a relative basis.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/Commentary-CGGCBHAU-m-6.pdfDecember, 2021
• For the three months ended 31 December 2021, Capital Group Global Corporate Bond Fund Hedged (AU) returned 0.0% before fees, while the index also returned 0.0%. Net of fees, the fund returned -0.1% . Over the one-year period, the portfolio returned -1.1% before fees and -1.7% after fees. The index returned -1.0% over the one-year period. Areas that helped the portfolio
• Security selection at the portfolio level strongly benefitted relative returns. At an individual issuer level, a nonindex position in Petroleos Mexicanos was the portfolio’s largest positive contributor to relative returns. The bonds continued to benefit from a strong oil price environment, government support and a recently announced liability management exercise.
• A non-index holding in Huarong Finance was also beneficial. The firm reported that it had agreed to an injection of equity capital. The bonds were purchased at attractive valuations given the sharp decline in price earlier in 2021 and our analyst’s belief that they would benefit from government support, which ultimately eventuated. Areas that hurt the portfolio.
• Curve positioning weighed on relative results, although this was mostly offset by the portfolio’s duration exposure.
• Security selection in the energy and technology sectors further detracted. Within the energy sector an overweight holding in Energy Transfer Operating was among the portfolio’s largest detractors from relative returns. The company came under pressure due to environmental concerns.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/Commentary-CGGCBHAU-q.pdfNovember, 2021
Over the month, Capital Group Global Corporate Bond Fund Hedged (AU) returned flat1 before fees, while the index returned 0.2%2. Net of fees, the fund was flat3 for the month. For the 12-month period, the portfolio returned -0.3%1 before fees, and -0.9% after fees3, compared to the index’s return of -0.4%2.
• Security selection detracted from relative results during the month, while sector/industry positioning made a modest positive contribution. Meanwhile, both duration and curve positioning had a neutral effect on relative results.
• Security selection in the energy sector detracted on a relative basis, as did an overweight position in the sector, albeit to a lesser extent. At an issuer level, an overweight position in MPLX was the most significant detractor from relative returns at the portfolio level.
• The choice of securities and an underweight position in the banking sector also hurt relative returns. At an issuer level, an overweight position in Goldman Sachs weighed on relative results.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/Commentary-CGGCBHAU-m-5.pdfOctober, 2021
Over the month, Capital Group Global Corporate Bond Fund Hedged (AU) returned 0.1%1 before fees, while the index returned -0.1%2
Net of fees, the fund returned 0.1%3 For the 12-month period, the portfolio returned 2.1%1 before fees, and 1.5% after fees3 ,compared to the index’s return of 1.4%2 . • Security selection in the electric sector added value on a relative basis. At an issuer level, an overweight position in Edison International was the top individual contributor to relative returns at the portfolio level.
• A non-index position in government-related securities also helped relative returns. At an issuer level, a nonindex position in Huarong Finance added value on a relative basis.
• The choice of issuers in the consumer non-cyclical sector weighed on relative results. At an issuer level, the portfolio’s overweight position in BAT Capital detracted on a relative basis.
• The choice of securities in the energy sector was also detrimental, though this negative return was moderated, to an extent, by the portfolio’s overweight position in the sector. At an issuer level, an overweight position in TransCanada Pipelines hurt relative results
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/Commentary-CGGCBHAU-m-4.pdfAugust, 2021
• Over the month, Capital Group Global Corporate Bond Fund Hedged (AU) returned -0.2%1 before fees, while the index returned -0.3%2 . Net of fees, the fund returned -0.3%3 . For the 12-month period, the portfolio returned 2.5%1 before fees, and 1.9% after fees3 , compared to the index’s return of 2.6%2 .
• Sector/industry allocation contributed positively to relative returns, while security selection was a marginal detractor. Both the portfolio’s duration and yield-curve positioning detracted slightly from relative results.
• A non-index position in government-related securities significantly contributed to relative returns. At an issuer level, a non-index position in Huarong Finance was the portfolio’s overall top positive contributor on a relative basis.
• Security selection in the capital goods sector also helped relative results, in particular an overweight position in Boeing.
• Conversely, security selection in the banking sector detracted on a relative basis. At an issuer level, an underweight position in JP Morgan & Chase was among the top individual detractors from relative returns.
• The choice of securities in the energy sector also weighed on relative results, including an overweight position in ONEOK.
July, 2021
Over the month, Capital Group Global Corporate Bond Fund Hedged (AU) returned 1.3%1 before fees, while the index returned 1.3%2
Net of fees, the fund returned 1.2%3 . For the 12-month period, the portfolio returned 2.0%1 before fees, and 1.4% after fees3 , compared to the index’s return of 2.1%2 . • Security selection and an underweight position in the energy sector detracted on a relative basis. At an issuer level, an overweight position in Energy Transfer Operating weighed on relative results.
Security selection among government-related issuers also hurt relative results, though this was moderated to an extent by the fund’s overweight position in the sector. At an issuer level, both Deutsche Bahn and Huarong Finance detracted from relative results.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/Commentary-CGGCBHAU-m-2.pdfApril, 2021
Over the month, Capital Group Global Corporate Bond Fund Hedged (AU) returned0.6%1 before fees, while the index returned 0.7%2
.Net of fees, the fund returned 0.6%3 .For the 12-month period, the portfolio returned 5.4%1 before fees, and 4.8% after fees3 , compared to the index’s return of 4.6%2 . Security selection detracted from relative returns, as did sector/industry allocation, albeit to a lesser extent. The portfolio’s yield-curve positioning was positive, but duration positioning was a relative detractor. Security selection among government-related securities detracted from relative results. Most notably, a nonindex position in China-based asset manager Huarong Finance was the top individual detractor from relative returns.
• Security selection in the electric sector also detracted on a relative basis. Most notably, an overweight position in Pacific Gas and Electric weighed on relative results. Conversely, security selection in the banking sector was beneficial. At an issuer level, an overweight position in JP Morgan Chase & Co was the portfolio’s top positive relative contributor. In addition, security selection in the capital goods sector added value on a relative basis. At an issuer level, an overweight exposure to Boeinghelped relative returns.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/Commentary-CGGCBHAU-m-1.pdfNovember, 2020
Over the month, Capital Group Global Corporate Bond Fund Hedged (AU) returned 2.5%1 before fees, while the index returned 2.0%2. Net of fees, the fund returned 2.4%3. For the 12-month period, the portfolio returned 10.0%1 before fees, and 9.3% after fees3, compared to the index’s return of 6.7%2. Security selection contributed positively to relative returns during the month, though this was offset to an extent by a negative effect from sector/industry allocation. The fund’s duration exposure helped relative returns, while its curve positioning had a marginally negative impact.
The choice of securities in banking contributed positively to relative results, as did the fund’s underweight exposure to the sector. In particular, an overweight holding in UniCredit added relative value. Security selection in, and an overweight exposure to, the energy sector also contributed to relative results. Most notably, the fund’s overweight position in Energy Transfer Operating was among the top positive contributors to relative results in November. Conversely, security selection in the consumer non-cyclical sector proved detrimental to relative results.
In particular, an underweight position in AbbVie was the portfolio’s largest relative detractor within the sector. In addition, security selection in technology detracted from relative returns, as did the fund’s overweight position in the sector. The lack of a holding in Microsoft weighed on relative results. The fund’s cash position also had a negative impact in a month where credit spreads tightened and markets advanced.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/Commentary-CGGCBHAU-m.pdfticker: CIM0161AU
release_schedule: Monthly
commentary_block: Array
factsheet_url:
https://www.capitalgroup.com/adviser/au/en/fund-centre.cggcbhau.html
Right sidebar -> monthly fund commentary
manager_contact_details: Array
asset_class: Fixed Income
asset_category: Bonds - Global
peer_benchmark: Fixed Income - Bonds - Global Index
broad_market_index: Global Aggregate Hdg Index
structure: Managed Fund
fund_features:
Capital Group Global Corporate Bond Hedged aims to achieve over the long term, a high level of total return consistent with capital preservation and prudent risk management by investing in corporate investment grade bonds worldwide, while limiting exposure to currencies other than AUD through hedging. The Fund provides you access to an actively managed portfolio of corporate investment grade bonds worldwide, through its investment in Capital Group Global Corporate Bond Fund (LUX). The Fund will also have exposure to cash.
- Manager Address : Level 18, 56 Pitt Street, Sydney, NSW 2000
- Phone : 1800 026 192
- Website : https://www.capitalgroup.com/adviser/au/en
- Contact Email : Info.au@capitalgroup.com
- Contact Page : https://www.capitalgroup.com/adviser/au/en/contact-us.html