Who is the Best Bond Fund Manager in Europe?

Morningstar fund analyst Muna Abu-Habsa reveals the nominees for Fixed Income Fund Manager of the Year

Muna Abu-Habsa 12 February, 2018 | 3:02PM

Over the last few months Morningstar fund analysts have pulled together to identify managers who they believe are among the very best at what they do. The analysts put funds through a rigorous evaluation using this framework, which weighs the quality of management, the strength of the process used to run the fund, the quality of the parent organisation—including how it treats investors in its funds—performance, and costs.

Fixed Income Fund Manager of the Year Finalists

Manager:  Bart van der Made, Rob Drijkoningen and Gorky Urquieta

Nominated for work on: Neuberger Berman Emerging Market Debt - Hard Currency

Neuberger Berman’s emerging market debt hard currency team ticks all the boxes. Lead manager Bart van de Made and EMD co-heads Rob Drijkoningen and Gorky Urquieta have been working together on their hard currency strategy since 2000, first at NNIP and then at Neuberger Berman since 2013. The managers are very experienced in emerging-markets debt, with an average experience of over 21 years, and their ongoing collaboration is invaluable. They have successfully applied a proven process focused on bottom-up country selection.

Unlike many of their peers, they exclusively invest in hard currency debt. In that sense, this team has fewer levers to pull than many of their competitors. Nevertheless, they have been very successful in adding value for their investors through superior country selection. They have steered away from major defaults like Argentina, Ecuador and more recently Venezuela. Given the team’s above-average size, experience level and robust track record, we consider it one of the best in the category.

Manager: Eve Tournier

Nominated for work on: PIMCO GIS Euro Income and PIMCO GIS Diversified Income

Eve Tournier has 18 years of experience and her credentials include a very successful stint managing the Silver-rated PIMCO GIS Diversified Income since 2010, as well as the more recent PIMCO GIS Euro Income strategy, which holds a Morningstar Analyst Rating of Bronze.

As most other global portfolio managers at PIMCO, Tournier can leverage sizeable resources, in particular the group’s more than 50 credit analysts that play a key role here given the strong focus on corporate bonds for income generation.

But the primary responsibility for portfolio construction remains the fund manager’s, and she has demonstrated her ability to use these resources to good effect over time. Over Tournier’s tenure, both PIMCO GIS Diversified Income and PIMCO GIS Euro Income have delivered on their distribution objective without sacrificing capital preservation, and have outperformed their respective peers on a risk-adjusted basis. We also appreciate that Tournier is personally invested in all of the strategies she manages, which helps strengthen the alignment of her interests with those of investors. 

Manager: Mark Dowding, Russel Matthews and Mark Bathgate

Nominated for work on: BlueBay Investment Grade Euro Government Bond

Mark Dowding, Russel Matthews and Mark Bathgate jointly run the Bronze-rated BlueBay Investment Grade Euro Government fund. The trio of veteran fixed income investors boast an average of 20 years’ experience and bring to this European government bond strategy complementary skillsets, with solid expertise in rates as well as macro and central bank analysis. The fund managers can also leverage BlueBay’s well-resourced, experienced and stable Investment Grade team, which we consider one of the best in the European IG space.

They run a high conviction, top-down driven process, with country selection being the key alpha driver. There is a strong emphasis on fundamental macro analysis, with the differentiator being the team’s ability to evaluate how macroeconomics and politics shape the financial markets. The strength of the team and process reflects in the solid long-term performance numbers, which have been impressive since the fund was launched in 2010 on both absolute- and risk-adjusted basis.

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

Securities Mentioned in Article
Security NamePriceChange (%)Morningstar
Rating
BlueBay Inv Grd Euro Govt Bd I EUR166.16 EUR0.02
Neuberger Berman EM DbtHrdCcy EUR I Acc12.28 EUR0.32
PIMCO GIS Divers Inc R USD Inc10.01 USD0.79
PIMCO GIS Euro Income Bond E EUR Acc13.65 EUR-0.15
About Author

Muna Abu-Habsa  is a senior investment research analyst at Morningstar