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.
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.
What is Capital Group Global Corp Bond Hedged Capital Group Global Corp Bond Hedged is an Managed Funds investment product that is benchmarked against Global Aggregate Hdg Index and sits inside the Fixed Income - Bonds - Global Index. Think of a benchmark as a standard where investment performance can be measured. Typically, market indices like the ASX200 and market-segment stock indexes are used for this purpose. The Capital Group Global Corp Bond Hedged has Assets Under Management of 16.33 M with a management fee of 0.6%, a performance fee of 0.00% and a buy/sell spread fee of 0%.
How has the investment product performed recently?
The recent investment performance of the investment product shows that the Capital Group Global Corp Bond Hedged has returned 3.76% in the last month. The previous three years have returned -3.74% annualised and 7.68% each year since inception, which is when the Capital Group Global Corp Bond Hedged first started.
How is risk measured in this investment product?
There are many ways that the risk of an investment product can be measured, and each measurement provides a different insight into the risk present. They can be used on their own or together to perform a risk assessment before investing, but when comparing investments, it is common to compare like for like risk measurements to determine which investment holds the most risk. Since Capital Group Global Corp Bond Hedged first started, the Sharpe ratio is 0.12 with an annualised volatility of 7.68%. The maximum drawdown of the investment product in the last 12 months is -4.87% and -19.6% since inception. The maximum drawdown is defined as the high-to-low decline of an investment during a particular time period.
What is the relative performance of the investment product?
Relative performance is what an asset achieves over a period of time compared to similar investments or its peers. Relative return is a measure of the asset's performance compared to the return to the other investment. The Capital Group Global Corp Bond Hedged has a 12-month excess return when compared to the Fixed Income - Bonds - Global Index of 2.13% and 1.27% since inception.
Does the investment product produce Alpha over its Peers?
Alpha is an investing term used to measure an investment's outperformance relative to a market benchmark or peer investment. Alpha describes the excess return generated when compared to peer investment. Capital Group Global Corp Bond Hedged has produced Alpha over the Fixed Income - Bonds - Global Index of 0.14% in the last 12 months and 0.13% since inception.
What are similar investment products?
For a full list of investment products in the Fixed Income - Bonds - Global Index category, you can click here for the Peer Investment Report.
What level of diversification will Capital Group Global Corp Bond Hedged provide?
Capital Group Global Corp Bond Hedged has a correlation coefficient of 0.95 and a beta of 1.42 when compared to the Fixed Income - Bonds - Global Index. Correlation measures how similarly two investments move in relation to one another. This establishes a 'correlation coefficient', which has a value between -1.0 and +1.0. A 100% correlation between two investments means that the correlation coefficient is +1. Beta in investments measures how much the price moves relative to the broader market over a period of time. If the investment moves more than the broader market, it has a beta above 1.0. If it moves less than the broader market, then the beta is less than 1.0. Investments with a high beta tend to carry more risk but have the potential to deliver higher returns.
How do I compare the investment product with its peers?
For a full quantitative report on Capital Group Global Corp Bond Hedged and its peer investments, you can click here for the Peer Investment Report.
How do I compare the Capital Group Global Corp Bond Hedged with the Global Aggregate Hdg Index?
For a full quantitative report on Capital Group Global Corp Bond Hedged compared to the Global Aggregate Hdg Index, you can click here.
Can I sort and compare the Capital Group Global Corp Bond Hedged to do my own analysis?
To sort and compare the Capital Group Global Corp Bond Hedged financial metrics, please refer to the table above.
Has the Capital Group Global Corp Bond Hedged been independently verified by SMSF Mate?
This investment product is in the process of being independently verified by SMSF Mate. Once we have verified the investment product, you will be able to find more information here.
How can I invest in Capital Group Global Corp Bond Hedged?
If you or your self managed super fund would like to invest in the Capital Group Global Corp Bond Hedged please contact Level 18 56 Pitt Street Sydney NSW 2000 Australia via phone +61 2 8038 0808 or via email -.
How do I get in contact with the Capital Group Global Corp Bond Hedged?
If you would like to get in contact with the Capital Group Global Corp Bond Hedged manager, please call +61 2 8038 0808.
Comments from SMSF Mates
SMSF Mate does not receive commissions or kickbacks from the Capital Group Global Corp Bond Hedged. All data and commentary for this fund is provided free of charge for our readers general information.
Performance Commentary - January 31, 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.
Performance Commentary - December 31, 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.
Performance Commentary - November 30, 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.
Performance Commentary - October 31, 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.
Performance Commentary - September 30, 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.
Performance Commentary - August 31, 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.
Performance Commentary - July 31, 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
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