fund

Rated

This is one of our rated funds. They’re the ones our experts believe will do well for investors over the longer term. Top of the class!

Muzinich Bondyield ESG Hedged GBP S

A short dated, primarily investment grade ESG corporate bond fund.

  • 10245.00p
    Price (Inc)

    These are the shares in the fund that pay out an income to clients. The income is made up of the total dividends – the money a company can pay out to its investors – from the companies in the fund.

  • -
    Price (Acc)

    These are the shares in the fund that don’t pay out an income to clients. Any dividends – the money a company can pay out to its investors – are reinvested into companies in the fund. Despite no income, the shares should be worth more over time. Good incentive, eh?

  • 1.00% 0.00%

    Initial charge

    Some funds charge you when you first invest, which is aptly known as the initial charge. They’re usually between 3-5% but at Bestinvest, we usually don’t charge you a penny!

  • 0.40%
    Annual management charge

    This is how much the fund management company charges to run the fund. It’s like paying a babysitter, dog sitter or house sitter (that makes well-informed, heavily researched changes to improve your baby/dog/house when needed).

  • 0.67%
    Ongoing charges

    This stands for Ongoing Charges Figure. It’s the cost of running a fund and includes admin fees, manager fees, administration costs, etc.

  • 2.70%
    Yield

    How much the fund is currently paying out in income to investors. It’s NOT to be confused with the overall growth of a fund – a very different thing indeed. It’s also NOT a guarantee of future pay-outs, just a snapshot. This is more what it’s not than what it is…

Prices as at 26 May 2020, fund data last updated 20 February 2018

The Muzinich BondYield ESG fund is a short duration bond fund that invests predominantly in investment grade corporate bonds and selective high yield issues. The fund’s investment grade holdings aid performance in challenging economic environments whilst the high yield element aids performance during economic recoveries. Muzinich’s investment philosophy is based on finding quality securities that have enhanced return potential. They seek to make thoughtful credit decisions and not market timing decisions. By focussing on fundamental credit selection and idiosyncratic ideas, performance is driven by income and makes the fund less reliant on duration bets.

Fund summary

Sector Exchange Traded Funds
Structure OFFSHORE FUND
Launched January, 2016
Size £180m
Yield 2.70%
Charging basis Income
Dividends paid June, December (XD)

Charges

Standard initial charge 1.00%
Initial charge via Bestinvest 0.00%
Additional bid/offer spread 0.00%
Annual management charge 0.40%
Ongoing charges figure 0.67%

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Investment process

The fund invests primarily in short dated investment grade corporate bonds (a minimum of 60%) with the remainder of the portfolio consisting of either high yield debt (max 40%) and loans (max 10%). The portfolio must maintain an average credit rating of at least BBB-. The manager only invests in cash bonds (no credit derivatives are used within the portfolio) and all currency risk is hedged away. Initially the manager applies a zero tolerance screen for all companies that are non-compliant with the UN Global Compact, all companies involved in the production of controversial weapons and all companies where there is evidence of child labour in their operations. The fund will not invest in a company that generates more than 5% of revenues from the following industries: Alcohol, Tobacco, Gambling, Pornography, Weapons, Nuclear, Fur and speciality leather. To Muzinich a company’s likely future free cash flow—after payment of the company’s obligations—is the single most important factor in determining credit-worthiness. In order to calculate this number every credit is modelled with analysts assessing the company’s business, market standing, debt burden, liabilities, legal or regulatory challenges, and management skill.

Muzinich is an investment house that solely focusses on credit, both public and private, and are in our opinion one of the stand-out fixed income investors in the market today. The combination of defensive investment grade and higher returning yield provides investors with meaningful returns in what is a very low yield environment whilst keeping volatility low. It is not the strictest ESG fund in the sector, but it offers clients a significantly lower duration than peers and has more of an international exposure.

Manager research

Average monthly relative returns

  • 15/16 0.00%
  • 16/17 0.01%
  • 17/18 0.11%
  • 18/19 0.00%
  • 19/20 -0.37%

Bestinvest MRI

  • 3 years -0.09%
  • 5 years 0.00%
  • Career -0.03%
  • 3 years 40.50%
  • 5 years 0.00%
  • Career 56.80%

Performance figures are based on the average of monthly percentage returns relative to the benchmark index.

Tatjana Greil Castro

Greil Castro came to Muzinich from Metlife Investments, where she served as an Associate Director of the High Return Unit. Earlier, she worked as Senior Portfolio Manager in European High Yield for Fortis Investments and as a portfolio manager and credit analyst at Legal & General Investment Management. She has a Ph.D. from the London School of Economics, a Masters from the Kiel Institute of World Economics in Germany, and an M.Sc./B.S. in Economics from the University of Vienna.

Track record

Tatjana Greil Castro has 10.3 years experience of managing mutual funds in this sector. Over this period the average monthly return relative to the benchmark index has been -0.03%. During the worst period of relative performance (from November 2010 - March 2020) there was a decline of 9% relative to the index. The worst absolute loss has been 9%.

Periods of worst performance

Absolute -9.00% (January 2020 - March 2020)
Relative -9.00% (November 2010 - March 2020)

About the MRI

Our unique indicator: the Bestinvest Manager Record Index (MRI) measures the likelihood that the fund manager is adding value through their decisions. It is based on their performance record over the course of their career, adjusted for the amount of risk taken. MRI is an important contributor to our fund rating system but it is also vital to take account of qualitative factors. It is also very important to select funds to form a cohesive portfolio with an appropriate overall risk level.

Allocation

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Portfolio

Approx 80- 120 issuers. Predominantly US and European domiciled issuers.

Constraints

Portfolio duration 3-5 yrs. Min average credit quality BBB-. Max single issuer exposure: 3%.

Key Investor Information

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