(Repeat for additional subscribers)
June 26 (The following statement was released by the rating
Fitch Ratings assigned BlueBay Investment Grade
Bond Fund's (IGBF) an 'Excellent' Fund Quality Rating. The fund is managed by
BlueBay Asset Management LLP.
KEY RATING DRIVERS
The 'Excellent' rating reflects the fund's research-driven investment
allowing an effective exploitation of diversified sources of fixed income
returns within a well-defined risk-control framework. The rating is also
supported by the depth of BlueBay's dedicated fixed income resources. A strong
track record of over 11 years allows the fund to reach the highest rating level.
BlueBay IGBF is a sub-fund of a Luxembourg Part I SICAV and is UCITS
IV-compliant. Launched in November 2003, it is BlueBay's IG flagship fund with
EUR8.4bn of assets as of end-May 2014. The fund aims to generate an annual 150bp
above its benchmark (iBoxx Euro Corporates TR), gross of fees, which is
consistent with a 3% maximum tracking error.
The fund implements a well-balanced research-driven, capital
preservation-oriented investment process combining macro, fundamental, technical
and relative valuation inputs in a formalised, disciplined but also flexible and
Fixed income alpha sources result from the implementation of high
mainly relative value trades within well-defined risk guidelines. Macro
exposures and overall portfolio positioning are adjusted dynamically using a
derivatives-based overlay strategy.
Lead portfolio manager (PM) and co-CIO, Raphael Robelin, has 17 years of
investment experience. The fund benefits from the depth of BlueBay's IG fixed
income resources (22 PMs and analysts, with an average of 12 years' industry
Since its launch, the fund has ranked in the first quintile in the Lipper
category for performance. It has exceeded its objectives, with a 2.1% (gross of
fees) annualised excess return and an annualised 1.3% tracking error (as at
end-May 2014). Fitch will monitor the size of the fund, which is large compared
with peers, and its ability to maintain performance while managing any investor
redemptions. Fitch notes that the large fund size has not adversely impacted
performance to date. The fund was soft closed (i.e. limited new investments into
the fund) in 2009 to protect performance, and reopened in 2011.
Founded in 2001 and now owned by the Royal Bank of Canada
(AA/Stable/F1+), BlueBay Asset Management is a specialist credit asset manager
with assets under management of USD62.4bn as at end-March 2014 (of which
USD27.6bn were in IG sovereign and non-sovereign credit).
The rating may be sensitive to material changes in the investment or
processes or resources dedicated to the fund. A material adverse deviation from
Fitch's guidelines for any key rating driver could result in a downgrade. For
example, this may be manifested in significant structural deterioration in the
fund's performance due to its size or redemption pressures. Fitch sees limited
key person dependency given the depth of the IG team.
Fitch's Fund Quality Ratings combine Fitch's experience in qualitative fund
analysis with rankings and performance data from Lipper, a Thomson Reuters
company. Fitch's Fund Quality Ratings offer an independent,
forward-looking assessment of a fund's key performance and risk attributes and
consistency of longer-term returns, relative to peer group or benchmarks. The
ratings focus on the fund manager's investment process, key fund performance
drivers, risk management, and the quality of the fund's operational
Link to Fitch Ratings' Report: BlueBay Investment Grade Bond Fund