September, 2023
The Russell Investments International Bond Fund (AUD hedged) narrowly underperformed the benchmark in August.
Interest rates positioning detracted from performance (in aggregate) over the period, including an overweight to shorter-dated UK gilts and an overweight to US Treasuries. Active currency positioning also weighed on returns, including a short Chinese renminbi position and a long Japanese yen exposure. Partly offsetting this was a long US dollar position. Performance was further impacted by our credit positioning, including overweights to US high-yield industrials and European high-yield and investment-grade financials. Positioning within the hard currency emerging markets debt sector also impacted performance over the period; notably overweights to European and Latin American investment-grade debt. At the manager level, BlueBay, credit specialist Western Asset Management and the Russell Investments Integrated Governments Strategy all underperformed their respective benchmarks in August; the latter impacted in part by an overweight to longer-dated US Treasuries. In contrast, both the Russell Investments Intelligent Credit Strategy and corporate credit specialist Schroders outperformed. In terms of overall positioning, the Fund maintains a long duration exposure versus the benchmark, with overweights to US Treasuries and UK gilts and an underweight to Japanese government bonds. Credit positioning remains below strategic levels, with a tactical underweight in place. This tactical underweight reflects our view that credit spreads will widen as the lag effects of interest rate hikes feed into markets.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/Russell_Investments_International_Bond_Fund_-_A_Hedged-Class_A-English-RetIntFI-AUD-9.pdfAugust, 2023
The Russell Investments International Bond Fund (AUD hedged) narrowly underperformed the benchmark in August.
Interest rates positioning detracted from performance (in aggregate) over the period, including an overweight to shorter-dated UK gilts and an overweight to US Treasuries. Active currency positioning also weighed on returns, including a short Chinese renminbi position and a long Japanese yen exposure. Partly offsetting this was a long US dollar position. Performance was further impacted by our credit positioning, including overweights to US high-yield industrials and European high-yield and investment-grade financials. Positioning within the hard currency emerging markets debt sector also impacted performance over the period; notably overweights to European and Latin American investment-grade debt. At the manager level, BlueBay, credit specialist Western Asset Management and the Russell Investments Integrated Governments Strategy all underperformed their respective benchmarks in August; the latter impacted in part by an overweight to longer-dated US Treasuries. In contrast, both the Russell Investments Intelligent Credit Strategy and corporate credit specialist Schroders outperformed. In terms of overall positioning, the Fund maintains a long duration exposure versus the benchmark, with overweights to US Treasuries and UK gilts and an underweight to Japanese government bonds. Credit positioning remains below strategic levels, with a tactical underweight in place. This tactical underweight reflects our view that credit spreads will widen as the lag effects of interest rate hikes feed into markets.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/Russell_Investments_International_Bond_Fund_-_A_Hedged-Class_A-English-RetIntFI-AUD-8.pdfJuly, 2023
The Russell Investments International Bond Fund (AUD hedged) outperformed the benchmark in July.
Interest rates positioning contributed positively to performance (in aggregate) over the period, including an overweight to shorter-dated UK gilts and an underweight to Japanese government bonds. Partly offsetting these positions was an overweight to US Treasuries, which underperformed in July. Our long-held overweight to credit also added value, including overweights to European and UK high-yield and investment-grade debt. Positioning within the hard currency emerging markets debt sector added further value over the period; notably overweights to European and Latin American investment-grade debt. In contrast, active currency positioning detracted from overall performance in July. This included a short Swiss franc position and a long Japanese yen exposure. At the manager level, BlueBay was the best performer for the month, benefiting in part from overweights to two- and three-year UK gilts. Credit specialist Western Asset Management also performed well, while corporate credit specialist Schroders, the Russell Investments Intelligent Credit strategy and the Russell Investments Integrated Governments strategy all underperformed.
In terms of overall positioning, the Fund maintains a long duration exposure versus the benchmark, with overweights to US Treasuries and UK gilts and an underweight to Japanese government bonds. Credit positioning remains below strategic levels, with a tactical underweight in place. This tactical underweight reflects our view that credit spreads will widen as the lag effects of interest rate hikes feeds into markets.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/Russell_Investments_International_Bond_Fund_-_A_Hedged-Class_A-English-RetIntFI-AUD-1-1.pdfJune, 2023
The Russell Investments International Bond Fund (AUD hedged) underperformed the benchmark in the June quarter.
Interest rates positioning detracted from performance (in aggregate) over the period, including overweights to UK gilts and Canadian government bonds. Overweights to Australian government bonds and shorter-duration US Treasuries also weighed on returns; though this was partly offset by an underweight to five-year US Treasuries. An overweight to German bunds also added value. In terms of active currency positioning, a long Japanese yen position and short Australian dollar, Swiss franc and British pound positions impacted performance over the period, while a long US dollar position added value. Meanwhile, credit positioning had no material impact on overall returns in the second quarter. Whilst the Fund benefited from an overweight to US high-yield debt, this was offset by an underweight to hard currency emerging markets debt.
In terms of overall positioning, the Fund maintains a long duration exposure versus the benchmark, with overweights to US Treasuries and UK gilts and an underweight to Japanese government bonds. Credit positioning remains below strategic levels, with a tactical underweight in place. This tactical underweight reflects our view that credit spreads will widen as the lag effects of interest rate hikes feeds into markets.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/Russell_Investments_International_Bond_Fund_-_A_Hedged-Class_A-English-RetIntFI-AUD-7.pdfMay, 2023
The Russell Investments International Bond Fund (AUD hedged) underperformed the benchmark in May.
Interest rates positioning detracted from performance over the period (on aggregate). An underweight to Japanese government bonds weighed on returns, as did an overweight to UK gilts. Yields on UK gilts jumped as rate hike expectations increased in the wake of disappointing inflation data. In the US, an overweight to shorter duration Treasuries impacted performance; though this was partly offset by an underweight to five-year issues, which added value. Credit positioning contributed positively to overall performance in May; notably our exposures to European investment-grade and hard currency emerging markets debt. Meanwhile, active currency positioning had a relatively neutral impact on returns. Whilst the Fund benefited from long US dollar and short Swiss franc positions, these were offset by short euro and long Japanese yen exposures. At the manager level, BlueBay, corporate credit specialist Schroders and the Russell Investments Integrated Governments strategy all underperformed in May. In contrast, credit specialist Western Asset Management and the Russell Investments Intelligent Credit strategy both outperformed; the latter benefiting in part from its exposure to US investment-grade debt. Moving forward, the Fund is slightly long duration versus the benchmark, which is below strategic levels. Credit risk also remains below strategic levels, with a tactical underweight in place amid current, heightened market volatility.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/Russell_Investments_International_Bond_Fund_-_A_Hedged-Class_A-English-RetIntFI-AUD-5-1.pdfApril, 2023
The Russell Investments International Bond Fund (AUD hedged) performed in line with the benchmark in April. Active currency positioning contributed positively to performance over the period. This included a long euro position; the shared currency rising against its US counterpart on the back of easing European recession fears. Partly offsetting this euro exposure were a long Japanese yen position and a short Swiss franc position. Credit positioning also added value in April; notably overweights to European and UK credit.
An underweight to US securitised credit was also positive for the month. In contrast, interest rates positioning weighed on overall fund performance. This included an (aggregate) overweight to US Treasuries. However, the Fund did benefit from overweights to select US government issues; notably two- and 10-year US Treasuries. In terms of overall positioning, the Fund remains modestly long duration versus the benchmark. We are currently overweight US Treasuries and German Bunds, while underweight Japanese government bonds.
The Fund’s credit risk is below strategic levels with a tactical underweight in place amid current, heightened market volatility. At the manager level, corporate credit specialist Schroders and the Russell Investments Intelligent Credit strategy outperformed their benchmarks over the period; the latter benefiting in part from an overweight to US investment-grade financials. In contrast, BlueBay, credit specialist Western Asset Management and the Russell Investments Integrated Governments strategy all underperformed in April.
File:March, 2023
The Russell Investments International Bond Fund (AUD hedged) narrowly underperformed the benchmark in the March quarter. Interest rates positioning detracted from fund performance (in aggregate) over the period. This included an overweight to German bunds and an underweight to Japanese government bonds.
Partly offsetting these positions was an overweight to US Treasuries, which performed well amid the recent disruption to the US banking sector. In terms of active currency positioning, a long US dollar position added value (in aggregate) in the first quarter; though this was offset by a long Japanese yen exposure. Meanwhile, credit positioning added value over the period; notably an overweight to European hard currency emerging markets debt. The Fund also benefited from an underweight to US securitised credit.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/Russell_Investments_International_Bond_Fund_-_A_Hedged-Class_A-English-RetIntFI-AUD-5.pdfFebruary, 2023
The Russell Investments International Bond Fund (AUD hedged) outperformed the benchmark in February. However, the Fund did deliver negative absolute returns for the month.
Active currency positioning contributed positively to performance over the period; notably a long US dollar (USD) position. The USD made good gains amid US rate hike expectations and the currency’s perceived ‘safe haven’ qualities. A short Australian dollar position also added value. Partly offsetting these positions were long Japanese yen and Norwegian krone exposures. Credit positioning added further, albeit modest, value in February. This included an underweight to US investment-grade debt and overweights to European investment-grade and high-yield debt. An underweight exposure to securitised credit was also positive for the month. In contrast, interest rates positioning weighed on overall fund performance; notably an overweight to shorter-dated US Treasuries. This positioning was partly offset by underweight exposures to German bunds and UK gilts. At the manager level, corporate credit specialist Schroders and the Russell Investments Intelligent Credit strategy outperformed their benchmarks over the period; the latter benefiting in part from underweights to US investment-grade industrials and utilities. In contrast, BlueBay, credit specialist Western Asset Management and the Russell Investments Integrated Governments strategy all underperformed in February.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/Russell_Investments_International_Bond_Fund_-_A_Hedged-Class_A-English-RetIntFI-AUD-4.pdfJanuary, 2023
The Russell Investments International Bond Fund (AUD hedged) narrowly outperformed the benchmark in January. The Fund’s overweight to credit contributed positively to performance over the period, including overweights to European high-yield, investment-grade and hard currency emerging markets debt. An overweight to US high-yield debt and an underweight to US securitised credit also added value.
In contrast, active currency positioning detracted from overall performance in January; notably short euro, British pound and Australian dollar positions. All three currencies made good gains against the US dollar. A long Japanese yen position also weighed on returns. Performance was further impacted by interest rates positioning, albeit modestly. Whilst the Fund benefited from an overweight to Canadian government debt and an underweight to Japanese government bonds, these positions were overshadowed by an underweight to German bunds.
At the manager level, credit specialist Western Asset Management was the best performer over the period, benefiting in part from overweights to US high-yield financials and industrials. Corporate credit specialist Schroders also outperformed. In contrast, BlueBay, the Russell Investments Integrated Governments strategy and the Russell Investments Intelligent Credit strategy all underperformed in January.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/Russell_Investments_International_Bond_Fund_-_A_Hedged-Class_A-English-RetIntFI-AUD-2.pdfDecember, 2022
The Russell Investments International Bond Fund (AUD hedged) outperformed the benchmark in the December quarter. Interest rates positioning contributed positively to fund performance (in aggregate) over the period. This included our exposure to short-dated UK gilts in the early part of the quarter when bond yields fell in response to the political upheaval caused by UK prime minister Liz Truss’s resignation after less than 50 days in office. Truss, who now holds the title of shortest-serving prime minister in UK history, was replaced by former Chancellor of the Exchequer Rishi Sunak.
Credit positioning also added value over the period; notably our exposures to US and European high-yield debt, which performed well as spreads tightened over the quarter. Partly offsetting this was our emerging markets debt exposure. In contrast, active currency positioning detracted from overall performance in the final quarter; notably short Chinese yuan, Swiss franc and euro positions. All three currencies outperformed the US dollar over the period.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/Russell_Investments_International_Bond_Fund_-_A_Hedged-Class_A-English-RetIntFI-AUD-1.pdfNovember, 2022
The Russell Investments International Bond Fund (AUD hedged) outperformed the benchmark in November.
Interest rates positioning contributed positively to fund performance; notably an overweight to US government debt, which benefited from the decline in Treasury yields we saw over the period. Credit positioning also added value in November, including overweights to European high-yield and investment-grade debt. An overweight to European hard currency emerging markets debt added further value. In contrast, currency positioning detracted from overall fund performance in November; notably short Chinese yuan, Swiss franc and euro positions.
At the manager level, credit specialist Western Asset Management outperformed over the period, benefiting from an overweight to European corporates; notably high-yield industrials and investment-grade financials. In contrast, both the Russell Investments Integrated Governments strategy and the Russell Investments Intelligent Credit strategy underperformed in November; the latter impacted by underweights to European, US and UK investment-grade credit. BlueBay and Schroders also underperformed over the period.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/Russell_Investments_International_Bond_Fund_-_A_Hedged-Class_A-English-RetIntFI-AUD-3.pdfOctober, 2022
The Russell Investments International Bond Fund (AUD hedged) underperformed the benchmark in October. Interest rates positioning detracted from performance over the period; notably an overweight to US Treasuries and an underweight to UK gilts. In contrast, the Fund benefited from its credit positioning, including overweights to US and European corporate high-yield debt; notably financials and utilities. An overweight to European hard currency emerging markets debt also added value in October. Active currency positioning added further value over the period. This included long Hungarian forint, Norwegian krone and New Zealand dollar exposures. Partly offsetting this was a short British pound position. At the manager level, the Russell Investments Intelligent Credit strategy underperformed against a backdrop of easing credit market volatility, while BlueBay, Western Asset Management and corporate credit specialist Schroders all outperformed; the latter benefiting in part from their exposure to US asset-backed securities. The Russell Investments Integrated Governments strategy was flat for the month, with positive currency positioning offset by underweights to UK and Chinese government debt.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/Russell_Investments_International_Bond_Fund_-_A_Hedged-Class_A-English-RetIntFI-AUD.pdfSeptember, 2022
The Russell Investments International Bond Fund (AUD hedged) performed in line with the benchmark in the September quarter. Credit positioning contributed positively to fund performance; notably our exposures to US high-yield debt, European investment-grade corporates and European-based emerging markets debt. Active currency positioning also added value over the period, driven largely by our long US dollar exposure. In terms of strategic factor performance, our credit risk premium, currency factor and rates factor strategies all added value in the third quarter, while our term risk premium strategy detracted from performance.
In contrast, interest rates positioning detracted from overall returns. This included an overweight to US duration; positioning which was impacted by the sharp rise in bond yields we saw over the period. Our exposure to short-dated UK gilts also weighed on performance. Partly offsetting this was an underweight to German bunds. Toward the end of the quarter, we added to our high-yield debt exposure on the basis that current valuations are attractive. We also made some enhancements to the Fund to reduce its carbon emissions profile. These enhancements include reducing the Fund’s overall carbon footprint by 20% relative to the benchmark index and coal-related exclusions.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/192061506.pdfAugust, 2022
The Russell Investments International Bond Fund (AUD hedged) outperformed the benchmark in August. However, the Fund did deliver negative absolute returns for the month. Active currency positioning drove the Fund’s outperformance; notably a long US dollar exposure and short Swiss franc and British pound positions. In contrast, interest rates positioning detracted from returns, including overweights to US Treasuries and Australian and Canadian government bonds. Partly offsetting these positions was an underweight to German bunds. Meanwhile, credit performance was relatively neutral in August.
Overweights to US investment-grade financials and African and European hard currency emerging markets debt added value over the period, however this was offset by overweights to European high-yield and investment-grade financials. In terms of strategic factor performance, our currency factor strategies performed well in August, while our rates factor strategies weighed on returns. Our term risk premium and credit risk premium strategies had no material impact on overall performance. At the manager level, corporate credit specialist Schroders was the best performer over the period, benefiting in part from their exposure to US asset-backed securities. BlueBay and the Russell Investments Intelligent Credit strategy also outperformed in August, while Western Asset Management and the Russell Investments Integrated Governments strategy both underperformed.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/191059668.pdfJuly, 2022
The Russell Investments International Bond Fund (AUD hedged) outperformed the benchmark in July. Interest rates positioning contributed positively to fund performance over the period; notably overweights to US Treasuries and Australian government bonds. Partly offsetting these positions was an underweight to UK gilts. Credit positioning also added value in July. This included overweights to US and European corporate high-yield debt and European investment-grade debt. Overweights to US asset-backed securities – particularly collateralised loan obligations – and European and Latin American hard currency emerging markets debt added further value over the period.
In contrast, active currency positioning detracted from overall performance in July. In terms of strategic factor performance, our term risk premium, credit risk premium and rates factor strategies all performed well in July, while our currency factor strategies weighed on returns. At the manager level, Western Asset Management was the best performer over the period, benefiting in part from overweights to European investment-grade debt and US corporate high-yield debt. BlueBay and the Russell Investments Integrated Governments strategy were both flat for the month, while corporate credit specialist Schroders and the Russell Investments Intelligent Credit strategy underperformed.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/190246945.pdfJune, 2022
The Russell Investments International Bond Fund (AUD hedged) underperformed the benchmark in the June quarter.
Interest rates positioning contributed to the Fund’s underperformance over the period; notably overweights to German bunds and Australian and Canadian government debt. Partly offsetting this positioning was an underweight to UK gilts. In contrast, the Fund benefited from active currency positioning. This included a long US dollar (USD) position and short Norwegian krone (NOK) and Australian dollar (AUD) positions. The USD hit multi-decade highs in the second quarter after the US Federal Reserve twice raised interest rates, while both the NOK and AUD were impacted by weakness across the broader commodities spectrum. In terms of strategic factor performance, both our credit risk premium and currency factor strategies added value over the period, while our rates factor strategies detracted from performance. Our term risk premium strategy had no meaningful impact on overall returns. Meanwhile, credit positioning was mixed for the quarter. Whilst the Fund benefited from its short credit derivatives positioning, this was offset by overweights to European and US corporate high-yield debt and European and Latin American hard currency emerging markets debt.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/189402587.pdfMay, 2022
The Russell Investments International Bond Fund (AUD hedged) underperformed the benchmark in May.
Active currency positioning detracted from performance over the period, including short euro, Swiss franc and Australian dollar positions. Partly offsetting this positioning were short Norwegian krone and Chinese renminbi exposures. In contrast, credit positioning added value in May. This included an overweight to US asset-backed securities; notably collateralised loan obligations. Partly offsetting this positioning were our overweights to US and European corporate high-yield debt. Meanwhile, the Fund’s interest rates positioning was mixed for the month, with gains from an underweight to UK gilts and an overweight to US Treasuries offset by an overweight to German bunds. In terms of strategic factor performance, our credit risk premium, currency factor and rates factor strategies all detracted from returns over the period, while our term risk premium strategy was neutral for the month.
At the manager level, Schroders was the worst performer over the period. Western Asset Management, the Russell Investments Intelligent Credit strategy and the Russell Investments Integrated Governments strategy also underperformed in May, while BlueBay outperformed its benchmark. BlueBay benefited in part from overweight exposures to South African and Mexican government debt
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/188422768.pdfApril, 2022
The Russell Investments International Bond Fund (AUD hedged) narrowly outperformed the benchmark in April. However, the Fund did deliver negative absolute returns for the month. The Fund’s active currency positioning contributed positively to performance over the period; notably short euro, Swiss franc and Australian dollar positions. Partly offsetting these positions were long New Zealand dollar and British pound exposures. In contrast, the Fund’s interest rate positioning detracted from overall returns in April. Much of this was driven by overweights to German bunds, US Treasuries and Canadian government bonds. Meanwhile, credit positioning was mixed for the month. Whilst the Fund benefited from overweights to US and European corporate high-yield financials, these positions were countered by our overweights to European investment-grade credit and US assetbacked securities; notably collateralised loan obligations. Overweights to European and
Latin American hard currency emerging markets debt also weighed on returns. At the manager level, both Schroders and the Russell Investments Intelligent Credit strategy outperformed their respective benchmarks in April; the latter benefiting from underweights to European and Latin American hard currency emerging markets debt. BlueBay also outperformed its benchmark over the period, while Western Asset Management and the Russell Investments Integrated Governments strategy both underperformed.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/187432181.pdfMarch, 2022
The Russell Investments International Bond Fund (AUD hedged) underperformed the benchmark in the March quarter.
Interest rates positioning contributed to the Fund’s underperformance over the period; notably overweights to German bunds, Australian government bonds and US Treasuries. Partly offsetting this positioning were our underweights to UK gilts and Swedish government debt. In contrast, the Fund benefited from our long-held overweight to credit. This included underweights to US investment-grade industrials and utilities and an overweight to European hard currency emerging markets debt. Overweights to US and European corporate high-yield debt, US investment-grade financials and Latin American hard currency emerging markets debt limited further credit market gains. Active currency positioning also added value over the period, driven in part by long US dollar and short Swedish krona positions. Not holding the Russian rouble was also positive, while a long Japanese yen position detracted from returns. In terms of strategic factor performance, our credit risk premium, rates factor and currency factor strategies all detracted from returns over the period, while our term risk premium strategy had no meaningful impact on overall performance in the first quarter.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/186319327.pdfFebruary, 2022
The Russell Investments International Bond Fund (AUD hedged) underperformed the benchmark in February.
The Fund’s credit positioning detracted from performance over the period; notably our overweights to hard currency emerging markets debt, US and European corporate highyield debt and US investment-grade financials. Partly offsetting this positioning were our underweights to US investment-grade industrials and utilities. Active currency positioning also weighed on returns, including short Swedish krona, euro and Swiss franc exposures. These positions overshadowed gains from our short Czech koruna, Russian rouble and Norwegian krone exposures. Performance was further impacted by our interest rates positioning; notably an overweight to Australian government bonds, which underperformed as investors brought forward their rate hike expectations amid ongoing inflationary concerns and the Reserve Bank of Australia’s decision to end its bond purchase program in early February. [Note: The Fund has minimal exposure to Russia and zero exposures to both Ukraine and Belarus.]
At the manager level, both Western Asset Management and BlueBay underperformed their respective benchmarks in February; the former impacted in part by overweights to European hard currency emerging markets debt and corporate high-yield industrials. In contrast, the Russell Investments Integrated Governments strategy performed in line with its benchmark over the period, while both the Russell Investments Intelligent Credit strategy and Schroders outperformed.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/185154518.pdfDecember, 2021
The Russell Investments International Bond Fund (AUD hedged) underperformed the benchmark in the December quarter.
Interest rates positioning contributed to the Fund’s underperformance over the period; notably an overweight to US Treasuries and underweights to German bunds and UK gilts. In contrast, the Fund benefited from our long-held overweight to credit. This included overweights to US high-yield debt, non-agency collateralised mortgage obligations and non-agency commercial mortgage-backed securities. Our overweights to European, Latin American and African hard currency emerging markets debt also added value over the period. Meanwhile, active currency positioning had a relatively neutral impact on overall performance, with gains from short Swiss franc and Canadian dollar positions offset by long Chinese renminbi and South African rand exposures. In terms of strategic factor performance, our rates factor and currency factor strategies detracted from returns over the period, while our credit risk premium added value. Our term risk premium had no meaningful impact on overall performance in the fourth quarter
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/182695428.pdfNovember, 2021
The Russell Investments International Bond Fund (AUD hedged) narrowly outperformed the benchmark in November. Active currency positioning contributed positively to fund performance over the period; notably short Swedish krone and Australian dollar exposures. Partly offsetting this was a long Norwegian krona position. Credit positioning was also positive in November, including underweights to US investment-grade industrials and utilities. However, our overweights to US asset-backed securities and US and European corporate high-yield debt limited any further credit gains. Meanwhile, interest rates positioning had no material impact on overall performance in November. Whilst the Fund benefited from overweights to Australia and Japan, these positions were offset by our underweights to the UK and China. In terms of strategic factor performance, our term risk premium, credit risk premium and currency factor strategies all added value over the period, while our rates factor strategies had a negligible impact on returns.
At the manager level, Schroders and the Russell Investments Intelligent Credit strategy outperformed their respective benchmarks in November; the latter benefiting in part from underweights to Asian hard currency emerging markets debt and investment-grade industrials. The Russell Investments Integrated Governments strategy performed in line with its benchmark over the period, while Western Asset Management and BlueBay both underperformed
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/181787911.pdfOctober, 2021
The Russell Investments International Bond Fund (AUD hedged) performed in line with the benchmark in the September quarter.
Credit positioning contributed positively to fund performance; notably our overweights to asset-backed securities and non-agency commercial mortgage-backed securities. The Fund also benefited from overweights to European corporate high-yield industrials and US and European investment-grade financials. Partly offsetting these positions were our overweights to European hard currency emerging markets debt and US corporate high yield financials. Active currency positioning added further value over the period; notably short Swedish krone and Australian dollar positions. A long Japanese yen position limited further currency gains. In contrast, interest rates positioning detracted from overall returns in the third quarter, driven in part by an underweight to Chinese government debt. However, the Fund did benefit from an underweight to UK gilts. In terms of strategic factor performance, our term risk premium, credit risk premium and currency factor strategies all added value over the period, while our rates factor strategies detracted from returns.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/180249921.pdfAugust, 2021
The Russell Investments International Bond Fund (AUD hedged) performed in line with the benchmark in August.Credit positioning contributed positively to fund performance over the period; notably overweights to Latin American and Asian hard currency emerging markets debt, highyield financials and industrials and US securitised assets. Partly offsetting these positions was a short credit derivative exposure. Active currency positioning also added value in August, including short Swiss franc and Swedish krona positions. A long Norwegian krone exposure was also positive, while a long British pound position limited further currency gains. Meanwhile, interest rates positioning had no material impact on overall performance during the month, with underweights to German bunds and UK gilts offset by an overweight to US Treasuries and an underweight to Chinese government bonds. In terms of strategic factor performance, our term risk premium, credit risk premium and currency factor strategies all added value in August, while our rates factor strategy detracted from returns.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/179239713.pdfMarch, 2021
The Russell Investments International Bond Fund (AUD hedged) underperformed the benchmark in the March quarter.
Interest rates positioning detracted from performance over the period. Whilst underweights to the US and the UK added value, this was overshadowed by an overweight to Australia. In contrast, the Fund benefited from active currency positioning, including a long US dollar position and short Swiss franc and Swedish krona exposures. Partly offsetting this was a short Chinese renminbi position. Credit positioning also added value. This included overweights to US non-agency commercial mortgage-backed securities and hard currency emerging markets debt; notably European and Middle Eastern emerging markets. However, our overweight to Latin American hard currency emerging markets debt detracted slightly from returns.
During the quarter, we removed Voya, Colchester and Insight from the Fund’s manager line up and replaced them with Western Asset Management and Russell Investments’ Intelligent Credit strategy. We made these changes as we believe that by creating more separation between strategic factor biases and pure manager alpha, we can focus the Fund’s exposures on those factors and areas of the market with the greatest potential to add value over the longer term. Strategic factor exposures will be implemented through Russell Investments’ positioning strategies, while manager alpha will be harnessed through specialist active managers with more targeted investment mandates.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/171006388.pdfNovember, 2020
The Russell Investments International Bond Fund (AUD hedged) outperformed the benchmark in November. Credit positioning drove performance over the period, including overweights to hard currency emerging markets debt, US and European high-yield debt and US securitised assets. Partly offsetting this positioning was an underweight to US and European investment-grade debt. Active currency positioning was also positive for the month; notably long British pound and Norwegian krone positions.Limiting further currency gains were short Australian dollar and Chinese renminbi exposures.
In terms of strategic factor performance, our term risk premium, credit risk premium, rates factor strategies and currency factor strategies all contributed positively to returns in November. Meanwhile, interest rates positioning detracted from performance over the period, albeit modestly. Whilst our overweights to US and Mexican government debt added value, these positions were overshadowed by an overweight to Australian bonds. At the manager level, BlueBay was the best performer for the month, benefiting from overweights to US and European investment-grade financials as well as long Norwegian krone and Russian rouble positions. In contrast, the Russell Investments positioning strategy recorded the weakest performance in November; though the strategy did deliver positive absolute returns for the month. Short Australian dollar and Norwegian krone positions weighed on the strategy’s returns.
File: https://commentary.quantreports.net/wp-content/uploads/2021/01/163022393.pdfticker: RIM0007AU
release_schedule: Monthly
commentary_block: Array
factsheet_url:
Fund Factsheet
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:
Russell International Bond $A Hedged A aims to provide a total return, before costs and tax, higher than the Fund’s benchmark over the medium term by providing exposure to a diversified portfolio of predominantly fixed income securities denominated in foreign currencies and largely hedged into Australian dollars.
- Invests predominantly in debt securities issued by supranationals, international governments, quasi-governments, agencies and corporates as well as structured credit securities including mortgage and asset backed securities.
- The Fund may also be exposed to low grade or unrated debt securities, emerging markets and currency to a limited extent.
- Derivatives may be used to obtain or reduce exposure to securities and markets, to implement investment strategies and to manage risk.
- Foreign currency exposures are largely hedged back to Australian dollars.
- Manager Address : Level 1, 60 Martin Place, Sydney NSW 2000
- Phone : 02 9229 5111
- Website : https://russellinvestments.com/au
- Contact Page : https://russellinvestments.com/au/contact-us