October, 2023
The Fund outperformed its benchmark, mostly due to due good stock selection in BBB rated bonds.
Energy holdings performed well, amid rising oil prices. This included midstream issuers Enterprise Products and oil producer ConocoPhillips. Longer-dated bonds also outperformed, including CSX and McDonald's. On the downside, banks were among the Fund's detractors, including Bank of America, Citigroup, Wells Fargo, Morgan Stanley and UBS.
We bought attractive new US dollar issues in September, including Nordson's new 10-year bond, AerCap's 2027 bond and Constellation Energy's 30-year issue. In euros, we bought Pernod Ricard's 2033 bond, as well as National Grid's 2027 bond. In the secondary market, we topped up our conviction holding in RELX, one of our analyst's preferred issuers in media. On the sell side, we sold down TD Bank and Citigroup.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/C_COMDOC_en-gb-NN_AU60ETL01327-5.pdfAugust, 2023
The Fund underperformed the benchmark in August, as exposure to A rated bonds detracted.
Anglo American detracted, as economic data suggests a more challenging landscape. In banking, negative contributions from Bank of America, Citigroup and Wells Fargo were partially offset by positive performance from selective holdings in Virgin Money, UBS and HSBC.
In the primary market, we bought attractive new US dollar issues, including the 2053 bonds of McDonald's, the 2028 bonds of Ingersoll Rand and the 2054 bonds of ConocoPhillips. In euros, we bought the 2033 bonds of LVMH and the 2028 bonds of Amprion.
We tactically increased the Fund's cash positions over the month, as we expect a busy primary season from September onwards. This included selling KBC, which has outperformed recently, and Berry Global, to reduce our high yield risk.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/C_COMDOC_en-gb-NN_AU60ETL01327-3.pdfJuly, 2023
The Fund outperformed its benchmark, mostly due to good stock selection.
Financial holdings performed well in the month. In banks, Sumitomo Mitsui and the subordinated financials of Barclays gained, as did insurer MetLife . In real estate, Sirius and CBRE performed well. On the downside, Deutsche Telekom, British supermarket Tesco and Heathrow Airport weighed on returns.
Primary market activity was quieter in the month. We bought attractive new issue US dollar bonds such as the 2028 bonds of BFCM, the 2034 bonds of Waste Management and the 2029 bonds of Morgan Stanley. We also bought Toyota's 2030 bond and Heathrow's 2033 bonds in euros. In the secondary market, we topped up preferred US bank holdings, including JPMorgan. After a Wall Street Journal investigation into usage of lead cables by US telecommunications companies, we switched our holdings of AT&T into shorterdated positions. Lastly, we reduced our holding of Celanese.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/C_COMDOC_en-gb-NN_AU60ETL01327-1-1.pdfApril, 2023
The Fund underperformed its benchmark, mostly due to stock selection in A rated bonds.
On the whole, bank holdings struggled, amid wider concerns about the sector, including Bank of America and Citigroup. Aerospace and defence contractor Lockheed Martin also lagged. On the upside, the property sector rebounded from recent underperformance, as our holdings of CBRE and Sirius outperformed. Deutsche Bank, Société Générale, NatWest and Deutsche Bank were also beneficial.
In the primary market, we bought attractive euro new issue bonds, including the 2026 and 2030 bonds of Sika and the 2026 bonds of BPCE. In US dollars, we bought Morgan Stanley's new 2029 bonds, Wells Fargo's 2034 bonds and Walmart's 2053 bonds.
In the secondary market, we topped up Truist, one of the better quality US regional banks, which was available at a good price following turmoil in the banking sector. On the sell side, we sold the recently issued MetLife 2030 bond, to reduce risk in insurers. We also sold down Boston Scientific. The company is weighing an acquisition of Shockwave Medical, which could be detrimental to debt investors.
File:March, 2023
The Fund outperformed its benchmark in March, owing to good performance from BBB rated bonds.
Amid turmoil in the banking system, our bank holdings performed well. We had no exposure to Silicon Valley Bank (SVB), and benefited from positioning in Bank of America, Citigroup and Wells Fargo.
Deutsche Telekom also outperformed. On the downside, property holdings were among the detractors, including LEG, Sirius and CBRE.
In the primary market, we bought attractive new issue bonds including the 2033 US dollar bonds of Medtronic, the 2033 US dollar bonds of General Mills, the 2053 sterling bonds of Engie and the 2031 and 2028 euro dual issue from Anglo American.
In the secondary market, we added the bonds of US insurer Prudential, a conviction name which cheapened up amid the wider weakness in financials. We switched telecommunications holdings from Comcast to Charter, as we considered our Comcast holdings to be fully valued. We also sold our long-dated Salesforce bonds, as the firm has announced large stock buybacks which could hurt bondholders.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/C_COMDOC_en-gb-NN_AU60ETL01327-1.pdfFebruary, 2023
The Fund marginally outperformed the benchmark. However, positioning in single A rated bonds detracted. Longer dated bonds detracted over the month, including UnitedHealth, Oracle and Lowe's Companies. Utilities holdings detracted, including Duke Energy and NextEra. On the upside, banks performed well, including JPMorgan, Deutsche Bank, Virgin Money and BPCE. In the primary market, we bought attractive euro new issue banking bonds, including the 2026 callable bonds from Nordea Bank and Virgin Money's 2028 bonds.
We also bought Orsted's euro 2035 issue. In US dollars, we bought Amgen's new 2043 bond and Oracle's 2053 bonds. In the secondary market, we added a new holding in RELX, buying the 2030 US dollar bonds, which is one of our top choices in the media sector and favourably rated by our analysts. We switched out of Tesco's euro bonds to buy their cheaper longerdated pound sterling bonds. We also took profits in Omega Healthcare Investors.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/F_COMDOC_en-gb-NN_AU60ETL01327.pdfJanuary, 2023
The Fund outperformed its benchmark in January, owing to good stock selection and positioning in A and BBB rated bonds. Bank holdings performed well over the period. In particular, Barclays, Bank of America and Société Générale performed well. In the property sector, holdings in Sunac and Sirius outperformed. On the downside, our US Treasury holdings underperformed in risk-on conditions. We have zero exposure to Aroundtown, which rebounded from recent underperformance. An overweight in Volkswagen also weighed on returns. In the primary market, we bought the attractive euro new issue 2028 bonds of BPCE. In US dollars, we bought the 2034 bonds of PNC Financial and the 2038 bonds of Morgan Stanley. In the utilities sector, we bought Engie's 2035 and 2043 euro bonds as well as the corporate hybrids of EDP. In the secondary market, we bought the euro 2034 green bonds of EDF, which are more attractive than EDF's new issue bonds. On the sell side, we sold American Tower's 2027 and 2028 bonds to reduce risk in light of a rumoured acquisition of Cellnex. We reduced our overweight in T-Mobile and reduced our holding in General Motors.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/C_COMDOC_en-GB-NN_SLIA-1-2.pdfDecember, 2022
The Fund underperformed its benchmark in December, due to our holdings in single A rated bonds. Energy and utility companies underperformed, including Dominion Energy. US banks Citigroup and Bank of America also lagged. Conversely, Barclays was beneficial. Property holdings continued to outperform, including Sirius, Sunac and Shimao. In December, we bought attractive new euro bank bonds, including the 2029 issue from TD Bank and the senior non-preferred 2030 bonds of Société Générale.
In US dollars, we bought the 2033 bonds of Energy Transfer, which has attractive newissue pricing. In the secondary market, we bought a long-dated bond from Amgen, which has been weak following news of its acquisition of Horizon Therapeutics. We also topped up US insurer Centene, which is well priced in its peer group and we see good upside potential. We selectively reduced our euro bank holdings, including BNP Paribas, to raise cash for attractive new issues. We also exited casino owner Vici Properties, taking profits after strong performance
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/C_COMDOC_en-GB-NN_SLIA-1-1.pdfOctober, 2022
The Fund outperformed its benchmark in October, thanks to an overweight holding of BBB rated bonds and an underweight holding of A rated bonds. The Fund's top performer was General Electric. Long-dated holdings performed well over the month, including T-Mobile and UnitedHealth Group. Conversely, property bonds were the biggest detractors over the month. Notably Chinese issuers Sunac and Shimao lagged, as did European companies CTP, Sirius, CBRE and Cromwell. However, this was partially offset by positive returns from having zero exposure to Aroundtown. In October, we bought the attractive new euro 2032 dual issue from Pernod Ricard, as well as a 2042 issue from Germany's national railway Deutsche Bahn. In US dollars, we bought UnitedHealth's 2028 and 2053 new issue, Marsh & Mclennan's 2052 bonds and American Express' 2027 bond. In the secondary market, we topped up our conviction overweights, including Viatris. We shortened duration in Barclays, switching out of some of our 2029 bonds into attractively priced 2028 bonds. On the sell side, we sold Dell, as we are growing concerned about the outlook for the technology sector.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/C_COMDOC_en-GB-NN_SLIA-7.pdfSeptember, 2022
The Fund outperformed its benchmark in September thanks to strong asset allocation.
Property holdings underperformed. In particular, overweight positioning in Sirius and Cromwell detracted. Amid rising rates, long-dated bonds weighed on returns including JAB Holding Company, Apple and Orbia. On the upside, in a risk-off environment, our US Treasuries performed well. Shorter-dated bank holdings held up well, including Wells Fargo, Bank of America and Mitsubishi UFJ Financial.
In the primary market, our purchases focused on attractive new bonds from quality issuers. This includes the 2031 euro bonds of Medtronic and Ørsted's 2042 pound bond. We bought selective new issue bank bonds including the 2025 issue of Mitsubishi UFJ Financial Group and the 2024 bonds of TD Bank.
In the secondary market, we topped up our holding in Western Midstream, which is a contender to be uprated. We switched out of General Motors' 2048 bonds for its better value 2032 bonds. On the sell side, we selectively reduced our exposure to UK banks such as NatWest.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/C_COMDOC_en-GB-NN_SLIA-6.pdfAugust, 2022
The Fund underperformed its benchmark in August, mainly due to an overweight holding of BBB rated and high yield bonds. In terms of holdings, banks and financials weighed on returns. This included our overweight positions in Lloyds, Barclays and Deutsche Bank. On the upside, our short dated US Treasury holdings performed well. Chemicals producer Orbia outperformed, as did chipmaker SK Hynix.
In the primary market, we bought the attractive new 2031 euro bonds from utility issuer Eurogrid. In banks, in euros, we bought the 2032 Tier 2 bonds of Swedbank. In US dollars, we bought Apple's 2052 bonds and the 2032 bonds of medical technology issuer Becton Dickinson and Company. We continue to buy attractive shorter dated bonds, including the 2025 bonds from Wells Fargo in euros and the 2025 bonds of CRH in US dollars. We also switched our Anglo American exposure, selling the 2025 issue euro bonds to the in the 2029 pound bonds, which offer attractively priced. On the sell side, we reduced our high yield holdings, selling Howmet Aerospace and Teva Pharmaceuticals.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/C_COMDOC_en-GB-NN_SLIA-5.pdfJuly, 2022
The Fund outperformed its benchmark in July, thanks to good stock selection and an overweight in BBB rated holdings. Looking at individual issuers, aerospace holdings performed well, including General Electric, Howmet Aerospace and Boeing. Netflix outperformed, as results were above analyst expectations, even as the company lost a million subscribers in the second quarter. In utilities, Dominion Energy and National Grid performed well. On the downside, in risk-on conditions, our increased holding of cash and US Treasuries weighed on returns. Chinese property holdings were again detractors, including CIFI. We used our elevated cash position to buy attractive, well-priced bonds. In the primary market, in euros, we bought the new 2029 green bonds of SSE. In US dollars, we bought the 2025 and 2029 bonds of materials producer Celanese, as well as the 2052 US dollar bonds of PepsiCo. In the secondary market, we bought cheaply priced short-dated bonds, including Heathrow Airport. We switched out of Bank of America's 2028 pound sterling bonds to buy the recently issued 2026 US dollar bonds, which have better upside potential. We also sold down carmaker Toyota.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/C_COMDOC_en-GB-NN_SLIA-4.pdfJune, 2022
The Fund underperformed its benchmark in June, mostly due to an overweight holding of BBB and high-yield bonds while underweight in A rated issues.
Health issuers were among the Fund's detractors, including insurer UnitedHealth Group and pharmaceutical companies Viatris and Bayer. As oil prices came off their recent highs, TotalEnergies also detracted. On the upside, the Fund's defensive US Treasury holding held up as riskier credit sold off. European banks BCPE and ABN Amro also outperformed.
We made selective purchases in new-issue bonds where we see some value. In the primary market, we bought the attractive new euro 2025 bonds from Mitsubishi UFJ. In US dollars, we bought new 2025 bonds from Enel and the 2024 bonds from Eversource Energy.
June has been another difficult month for global credit. Concerns about inflation remained high, and additional uncertainties came from a slowing growth dynamic and the war in Ukraine's impact on food prices and gas supplies. Credit spreads widened sharply as investors priced in a potential gas curtailment, which could lead to a recession in Europe, and an aggressive Fed, whose monetary policy could lead to a recession in the US. In euros, credit spreads are now 200bps above government bonds, a level which historically has only occurred in recessionary times. In US dollars, credit spreads are now at 160bps over government bonds, 60bps higher than the start of the year and 25bps short of mild recession pricing in the US.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/C_COMDOC_en-GB-NN_SLIA-3.pdfJanuary, 2022
The Fund underperformed the benchmark in January. Ongoing concerns regarding the Chinese property sector weighed on the Fund's holdings in Shimao, Zhenro Properties, Country Garden, CIFI Holdings and Sunac. Longer-dated bonds also generally fared less well compared to the broader market, including holdings in Salesforce and HCA Healthcare.
On the positive side, amid risk-off conditions, the Fund benefited from its holdings of short-dated Treasury bills. An increased cash position and a tactical defensive short position in the iTraxx Xover index also contributed positively over the month. Continued oil price strength was supportive for the Fund's off-benchmark holdings in the Mexican state-owned oil company Pemex.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/C_COMDOC_en-GB-NN_SLIA-2.pdfOctober, 2021
The Fund underperformed the benchmark in October. In terms of ratings bands, this mainly reflected our overweight exposure to high yield and BBB rated credits.
In terms of individual holdings, continuing negative news from China, regarding the financial health of the property developer Evergrande, weighed on the broader Chinese real estate sector. This led to negative contributions from our holdings in Sunac, Shimao Group, Zhenro Properties and Country Garden.
October has seen a pick-up in market volatility, as inflation concerns caused government bond yields to rise, with markets pricing in earlier rate hikes by the Federal Reserve and the Bank of England. The European Central Bank's October meeting surprised, given a small hawkish tilt. In particular, President Lagarde was seen as not firmly pushing against recent market pricing of the first rate hike potentially occurring at the beginning of 2023. There was also some lack of clarity regarding what comes after the phase out of the pandemic emergency purchase programme in April 2022
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/C_COMDOC_en-GB-NN_SLIA-1.pdfAugust, 2021
The Fund comfortably outperformed the benchmark in August, owing mainly to good security selection. In terms of individual holdings, after the severe sell-off of the previous month, when China's domestic regulatory crackdown had a negative impact, many of the worst performers bounced back strongly in August. Examples of this included the property companies Sunac, Country Garden, Zhenro Properties and Shimao Group.
On the negative side, a number of the Fund's longer-dated holdings detracted, including those of ratings agency Moody's, US energy provided Exelon and the US wireless telecoms company T-Mobile. In the primary markets, we bought the attractively priced 2025, 2028 and 2051 euro bonds of the German residential real estate company Vonovia. We like the property sector generally for its high degree of earnings visibility.
Similarly, we bought the new issue 2051 sterling bonds of the UK's largest housing association, Clarion. We also bought the 2028 euro bonds of National Grid, which benefits from reliable earnings, helped by the UK's transparent, stable and predictable regulatory regime. In US dollars, purchases included the attractively priced 2041 bonds Westlake Chemical. In the secondary market, we bought the 2031 bonds of Citigroup. On the sell side, in the light of ongoing regulatory developments in China, we reduced associated risk and took profits in Alibaba Group. We also reduced exposure to American Tower, by selling its 2029 euro bonds, which had significantly outperformed the US dollar bonds of the same issuer.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/C_COMDOC_en-GB-NN_SLIA.pdfNovember, 2020
The Fund strongly outperformed the benchmark over the period. Amid riskon conditions, off-benchmark High Yield holdings performed well, as well as an overweight in BBB rated credits and underweight in A rated credits. In terms of individual securities, with the oil price (Brent crude) surging by 27% over the period, this was beneficial for energy-related credits, including our holdings in Continental Resources, Plains All America Pipeline and Halliburton.
In addition, risk-on conditions were supportive for longer dated bonds, including the Fund’s holdings in Apple, AbbVie and CVS Health. On the negative side, strong investor sentiment was less favourable for the Fund’s off-benchmark holdings in UK gilts. In addition, holdings in China National Agrochemical Corporation (also known as ChemChina) detracted as it was added to the list of companies deemed to have links with the Chinese military by the outgoing US Trump administration.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/136532-CD-Australian-Trust-Nov20.pdfticker: ETL0132AU
release_schedule: Monthly
commentary_block: Array
factsheet_url:
LITERATURE -> Monthly Commentary
On the PDF File ==> Portfolio Review
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:
Aberdeen Standard Global Corporate Bond Fund aims to provide long term growth and outperform the Benchmark over rolling 3 year periods (before deduction of fees, costs and taxation) by investing predominantly in global investment grade bonds. The Fund is actively managed and may invest in a wide range of bonds (e.g. corporate bonds including high yield bonds, government backed securities, overseas bonds, index-linked bonds, floating rate notes (‘FRNs’) and asset backed securities (‘ABSs’) and/or money market instruments) in order to take advantage of opportunities identified.
- Manager Address : Level 10 255 George Street, Sydney, NSW, 2000
- Phone : +61 2 9950 2888
- Website : https://www.aberdeenstandard.com/en/australia/investor
- Contact Email : client.service.aust@aberdeenstandard.com
- Contact Page : https://www.aberdeenstandard.com/en/australia/investor/contact-us?country=Australia