Speaking at an event this morning, co-portfolio managers of the Nedgroup Investments Global Strategic Bond Fund, David Roberts and Alex Ralph outlined their thoughts on challenges and opportunities for bond markets for the year ahead.

Whilst the duo had predicted an income level of return for 2024, both believe 2025 will provide greater opportunities for active managers to take advantage of volatility ahead, not least because of Trump.

Credit

Alex Ralph commented whilst spread compression drove much of the fund’s 5% return in 2024, this year she was positioning for carry as there was little room for credit spreads to compress further.

Alex Ralph, co-portfolio manager of the Nedgroup Investments Global Strategic Bond Fund said: “Last year wasn’t very exciting, both fundamentals and technicals were extremely supportive for credit driving spreads tighter with little volatility. With valuations now stretched, the market is vulnerable to either negative macro headlines or a deterioration in demand. We believe spreads are more likely to widen by year end and see expect greater opportunities to implement tactical calls as volatility picks up.

“Positioning for carry rather than compression is a more defensive tactic and we prefer sectors such as Utilities which aren’t exposed to the economic cycle. Within Financials, we currently favour the Nordics and Global Banks which tend to outperform in a systematic sell off.”

She has also reduced credit duration, “We’re now positioned at the shorter end of the credit curve, where breakevens are more attractive providing a decent cushion against widening spreads,” she notes.

Macro

David Roberts said that focusing on the core markets enabled the fund to avoid the riskier corners of the market and that there was plenty of opportunity from current volatility in their tried and tested core hunting ground.

David Roberts, co-portfolio manager of the Nedgroup Investments Global Strategic Bond Fund said: “There are plenty of opportunities we can continue to exploit through 2025. Yields have risen and now offer inflation beating returns, which provides an attractive entry point for investors. Unless global economic activity really improves, bonds look a bit cheap.

“Divergence among the G7 creates cross-market opportunities. Not all G7 central banks are moving at the same speed – we have zero exposure to Japan which we think looks expensive, with the central bank likely to continue to raise rates.

“The European block is likely to continue to cut rates – good for bonds. And we like the US, where we believe inflation might actually fall, despite Trump’s policies.”

The team believes their objective to run a core defensive strategic global bond fund is working well.

“We’re delivering what we said, an inflation-beating return without taking too much risk,” David Roberts concludes.

For further information, or an interview with Alex or David, please do get in touch.

About Nedgroup

Nedgroup Investments is a global asset manager with over $21 billion AUM and a 20-year heritage. At Nedgroup Investments we believe everyone should benefit from the difference that the best boutiques bring. As an investment-led business, we are dedicated to finding exceptional fund managers and providing the right conditions for them to perform. We foster multi-decade relationships to enable managers and teams to flourish over the long-term offering our clients more choice, better access and deeper alignment with their investments.

We champion boutiques. We select the exceptional. We partner for decades.

The Nedgroup Investments Global Strategic Bond Fund is available on the following platforms:

7IM
Aegon UK Institutional
AJ Bell
Allfunds
Aviva
Fidelity International
Fundment
Hargreaves Lansdown
Hubwise
Wealthtime (Novia)
Quilter
Transact

View source version on businesswire.com: https://www.businesswire.com/news/home/20250211068812/en/

Press contacts

Sam Emery, Emma Murphy, Nick Croysdill, Emma Taylor
Quill PR
020 7466 5050
nedgroup@quillpr.com

Taryn Menne
Nedgroup Investments
+27 (0) 82 880 3570
tarynmc@nedgroupinvestments.co.za

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