Fund commentaries

Our fund managers write regularly on the pressing issues relating to the investments in their funds. Below are the latest articles from our team.

Sterling Corporate Bond Fund

  • 04 May 2012

All risk markets suffered a setback during April, to greater or lesser extents, as concerns over continental Europe and US economic growth resurfaced. Investors became nervous about the political situation in France, where the prospect of socialist Presidential candidate François Hollande gaining power was met with some unease. The market also became sceptical about the Spanish government’s willingness to push through much needed austerity measures after it adjusted down its budget deficit target. Finally, the general weakening of the US economic outlook added to the air of disquiet. In the face of these headwinds, credit markets unsurprisingly gave up some of their gains of the first quarter.

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Iain Buckle

  • Investment Manager, Fixed Income

Strategic Bond Fund

  • 03 May 2012

Core government debt was once again the star performer. After several months of trading weaker to sideways, markets moved to retest - and on occasion breach - yield lows. German and Australian bonds were the best places to be. The yield on 10-year bunds closed below 1.7% for the first time since November 2011.

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David Roberts

  • Joint Head of Fixed Income

Strategic Global Bond Fund

  • 03 May 2012

Against such a backdrop credit markets could have been expected to perform more poorly. However, renewed monetary easing in China, India and Australia, to name but three, provided support. Weaker macro data in western markets heightened expectation of further quantitative easing. A rising tide lifts all but the leakiest of boats.

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David Roberts

  • Joint Head of Fixed Income

High Yield Global Bond Fund

  • 04 May 2012

The Kames High Yield Global Bond Fund returned 0.02% during April, a third quartile performance compared to the Lipper peer group median return of 0.45%. Year-to-date the Fund has returned 8.07% compared to a peer median of 6.67% placing the Fund in the first quartile. The key contributor to the Fund’s outperformance year-to-date has been its greater weighting to European credit than its peers.

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Melanie Mitchell

  • Investment Manager, Fixed Income

High Yield Bond Fund

  • 04 May 2012

The Kames High Yield Bond Fund returned -0.04% during April, a second quartile performance compared to the Lipper peer group median return of -0.44%. Year-to-date the Fund has returned 7.34% compared to a peer median return of 7.86%.* The main reason for the Fund’s underperformance year-to-date has been its lesser weighting to riskier credit, and in particular to peripheral European credit, than its peers.

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Melanie Mitchell

  • Investment Manager, Fixed Income

Strategic Bond Funds investment in US RMBS

  • 03 May 2012

In May 2011 we started investing in US residential mortgage-backed securitizations (US RMBS) as we believed this was an asset class where prices reflected an overly pessimistic view of the US economy in general and its housing market in particular. Our analysis also showed US RMBS offered very good diversification properties for a balanced fixed income portfolio, compared to a portfolio of conventional investment grade and high yield credit. 

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Iain Buckle

  • Investment Manager, Fixed Income
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Phil Milburn

  • Investment Manager, Fixed Income

UK Equity Absolute Return Fund - Q1 2012 Report

  • 02 May 2012

The Kames UK Equity Absolute Return Fund achieved a return of 30 basis points over the first quarter of 2012.* While that number in isolation may look a bit dull, it was achieved in a market that saw significant rotation and changing sentiment.

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David Pringle

  • Investment Manager, UK Equities

Investment Grade Bond Fund

  • 09 March 2012

This is a comment I heard today from a representative of a major UK bank. I’ve been back at Kames Capital for eight months and the current debate surrounding the lack of liquidity in the corporate bond market reminds me of a deep concern I held about leaving the firm in 2003. Back in those days AEGON, when you include the Dutch and U.S. operations, was the fourth largest fixed income asset manager in the world. Therefore as one of the largest investors in the bond market globally, we had the head of client relations from every major investment bank come in and court us on a regular basis.

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Stephen Snowden

  • Investment Manager, Fixed Income