Global asset manager AllianceBernstein (AB) said today that investment research house Lonsec has upgraded to “Recommended” its rating for the AB Dynamic Global Fixed Income Fund.
“We are delighted with this upgrade, which comes after the Fund’s strong performance in a challenging market environment,” said Jen Driscoll, AB’s Chief Executive Officer—Australia. “Its success to date supports our firmly held view that fixed income still has a place in investors’ portfolios, despite record low interest rates and market volatility.”
The Fund is designed for investors with higher risk tolerances who want to achieve income returns exceeding those of bank bill rates. It uses a highly diversified strategy which invests globally across fixed-income sectors and in a broad range of debt securities.
While the Fund uses the Bloomberg Ausbond Bank Bill Index (BAUBIL) as a performance benchmark, it does not reference any market index for the purposes of portfolio construction.
Lonsec originally assigned an “Investment Grade” rating after the Fund was launched in June 2014. In a note explaining the upgrade, the research house observed that it preferred to make assessments based on a track record of three years.
“That said, the Fund has performed well over its short history,” said Lonsec.
It also noted that it has conviction in lead Portfolio Manager, John Taylor, and has been “impressed by the investment team’s focus on risk management as well as its diversification of alpha sources within the portfolio”.
From inception to August 31, 2016, the Fund has achieved total returns1 of 4.26% compared to 2.40% for the BAUBIL.
“Despite the short track record of the Australian Trust, the underlying strategy has been running since June 2008,” said Lonsec. “Since inception the strategy’s average annual Australian dollar return has met the manager’s internal performance target of 2%–3% above [the BAUBIL], before fees.”
