Fund performance (net)
Fund |
Fund (%) |
Index/median (%) |
Aegon Strategic Global Bond Fund* |
2.00 |
1.16 |
Aegon High Yield Global Bond Fund* |
1.43 |
0.77 |
Aegon Investment Grade Global Bond Fund* |
1.59 |
1.57 |
Aegon Global Short Dated High Yield Climate Transition Fund** |
0.94 |
0.34 |
Aegon Absolute Return Bond Fund*** |
0.51 |
0.35 |
Aegon Global Short Dated Climate Transition Fund**** |
0.70 |
0.35 |
- February’s US economic data releases continued to disappoint, following the unexpectedly low Q4 GDP data at the end of January.
- This led to a sharp decline in US Treasury yields, with the 10yr and 2yr Treasuries, falling by 31bps and 21bps respectively. In contrast, European and UK data largely exceeded expectations. Although Gilt and Bund yields also fell, it was not to the same extent as Treasuries.
- Against that backdrop, credit spreads widened, with credit generally underperforming sovereigns. However, rate sensitive sectors such as property performed better, supported by falling yields.
- There was, however, little material shift in interest rate expectations; with just one 25bps cut from the Fed expected by end June and a further cut by year end.
- Strong bottom-up security selection was a key driver over the period, exploiting opportunities across investment grade, high yield and emerging markets.
- Tighter credit spreads favoured a lower level of overall credit market risk (beta) as sentiment weakened into month end.
- Additional duration risk and a bias towards steeper yield curves was beneficial with exposure to US and Canadian interest rates being a particular positive.
- Despite the barrage of headlines related to tariffs and politics, the high yield market held steady, benefiting from rate movements and continued coupon payments.
- Security selection was the primary driver with outperformance across all rating categories.
- By region and currency, the fund’s preference for Europe/UK contributed positively to outperformance, as EUR and GBP fund holdings outpaced the overall market.
- We continue to focus on income generation while maintaining defensive positioning to help insulate the portfolio from potential downside risk.
- The headline duration of the fund was fairly static through the month at approximately 5.9 years.
- Among our best performing positions were those in our preferred banking and real estate sectors, including bonds from Intesa Sanpaolo and Heimstaden Bostad.
- It was an active month with opportunities in both primary and secondary markets. The latter proved more rewarding, allowing us to add diverse health care exposures through Merck and Centene. In the primary market, we added a Euro deal from well rated Johnson & Johnson, which we exited after capturing strong initial performance.
- By ratings, the B-rated holdings contributed the most to the fund’s return, followed by BB rated holdings.
- During the month, the overall positioning remained consistent with a focus on short-dated bonds that offer enhanced yields with lower volatility.
- We remain focused on investing in higher-quality bonds with elevated coupon rates to add income to the fund.
- The Credit module delivered strong performance, with the collection of hedged corporate bonds adding value and the bond/CDS basis trades also performing well.
- The Carry module was solid over the month, supported by ongoing demand for short-dated corporate bonds.
- The Rates module faced some headwinds, as gains from US and German curve steepening positions were offset by a long 10yr Australia vs short 10yr US trade
- The positive total return was driven by a decline in global short-dated government bond yields, most notably in the US.
- The headline interest rate exposure remained broadly unchanged at just over 2.5 years. However, we increased US duration exposure while reducing UK duration.
- The best individual stock performances were typically the US$ denominated holdings, especially in the financial and real estate sectors. Notable performers included US$ bonds from real estate company, Aroundtown, and French bank BPCE.
- Changes were primarily due to the reinvestment of proceeds from maturing bonds and new primary opportunities. Positions were added in bonds from Johnson & Johnson, Motability, and Unibail-Rodamco-Westfield, amongst others.
*Source: Lipper as at 28 February 2025. Performance shown is for the B USD Inc share class.
**Source: Lipper as at 28 February 2025. Performance shown is for the B USD Acc share class. On the 18 December 2023, the name changed from the Aegon Short Dated High Yield Global Bond Fund to the Aegon Global Short Dated High Yield Climate Transition Fund.
***Source: Lipper as at 28 February 2025. Performance shown is for the B GBP Acc share class.
****Source: Lipper as at 28 February 2025. Performance shown is for the S GBP Acc share class. Share class inception 4 March 2021. On the 15 July 2022, the name changed from the Aegon Short Dated Investment Grade Bond Fund to the Aegon Global Short Dated Climate Transition Fund.
Performance drivers discussed within this flash report may be based on preliminary attribution reports, which can differ from final month-end attribution. NAV to NAV, noon prices, income reinvested, net of ongoing charges, excluding entry or exit charges. Past performance is not a guide to future returns. The Funds are incorporated in the following Lipper Global peer groups - Aegon Strategic Global Bond Fund is in the Bond Global sector, Aegon High Yield Global Bond Fund is in the Bond Global High Yield sector. Benchmark and sector median source: Lipper. Aegon Investment Grade Global Bond Fund is measured versus the Barclays Global Aggregate Corporate. Aegon Absolute Return Bond Fund is measured against SONIA 3 Month GBP. Aegon Global Short Dated Climate Transition Fund is measured against SONIA GBP. Aegon Global Short Dated High Yield Climate Transition Fund is measured against SOFR USD.
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The main risks of investing in these funds are:
Credit |
Liquidity |
Counterparty |
Other markets |
Concentration |
Derivatives |
Interest Rates |
Fund charges |
|
Strategic Global Bond Fund |
✘ | ✘ | ✘ | ✘ | ✘ | ✘ | ✘ | |
High Yield Global Bond Fund |
✘ | ✘ | ✘ | ✘ | ✘ | ✘ | ✘ | ✘ |
Investment Grade Global Bond Fund |
✘ | ✘ | ✘ | ✘ | ✘ | ✘ | ||
Global Short Dated High Yield Climate Transition Fund |
✘ | ✘ | ✘ | ✘ | ✘ | ✘ | ✘ | ✘ |
Absolute Return Bond Fund |
✘ | ✘ | ✘ | ✘ | ✘ | ✘ | ||
Global Short Dated Climate Transition Fund |
✘ | ✘ | ✘ | ✘ | ✘ | ✘ | ✘ |
For more information on the risks involved with these funds please see the Prospectus/KIID.
*Source: Lipper as at 31 December 2024. Performance shown is for the B USD Inc share class.
**Source: Lipper as at 31 December 2024. Performance shown is for the B USD Acc share class. On the 18 December 2023, the name changed from the Aegon Short Dated High Yield Global Bond Fund to the Aegon Global Short Dated High Yield Climate Transition Fund.
***Source: Lipper as at 31 December 2024. Performance shown is for the B GBP Acc share class. The benchmark changed from LIBOR to SONIA on or around 9th of December 2021.
****Source: Lipper as at 31 December 2024. Performance shown is for the S GBP Acc share class. Share class inception 4 March 2021. On the 15 July 2022, the name changed from the Aegon Short Dated Investment Grade Bond Fund to the Aegon Global Short Dated Climate Transition Fund.
NAV to NAV, noon prices, income reinvested, net of ongoing charges, excluding entry or exit charges. Past performance is not a guide to future returns. The Funds are incorporated in the following Lipper Global peer groups - Aegon Strategic Global Bond Fund is in the Bond Global sector, Aegon High Yield Global Bond Fund is in the Bond Global High Yield sector. Benchmark and sector median source: Lipper. Aegon Investment Grade Global Bond Fund is measured versus the Barclays Global Aggregate Corporate. Aegon Absolute Return Bond Fund is measured against SONIA 3 Month GBP. Aegon Global Short Dated Climate Transition Fund is measured against SONIA GBP. Aegon Global Short Dated High Yield Climate Transition Fund is actively managed and is not constrained by any benchmark, other than the Bloomberg Global High Yield Corporate 1-5 Year Ba/B Index which is used as a reference point to measure carbon intensity.
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This is a marketing communication. Please refer to the following legal documents of the UCITS before making any final investment decisions. For UK investors: This product is based overseas (Ireland) and is not subject to UK sustainable investment labelling and disclosure requirements. Please read the Key Investor Information, Prospectus, Supplementary Information Document and Application Form carefully. Consider getting financial advice if you need help to understand the investment and both the risks and opportunities involved. This product is authorised overseas but not in the United Kingdom and the Financial Ombudsman Service is unlikely to be able to consider complaints related to the product, its operator or depositary. Any claims for losses relating to the operator or depositary of this product are unlikely to be covered under the Financial Services Compensation Scheme. For EU investors: please refer to the Prospectus and the PRIIPs KID. The relevant documents can be found at aegonam.com. The principal risk of this product is the loss of capital.
Past performance does not predict future returns. Outcomes, including the payment of income, are not guaranteed.
All investments contain risk and may lose value. Responsible investing is qualitative and subjective by nature, and there is no guarantee that the criteria utilized, or judgement exercised, by any company of Aegon Asset Management will reflect the beliefs or values of any one particular investor. Responsible investing norms differ by region. There is no assurance that the responsible investing strategy and techniques employed will be successful. Investors should consult their investment professional prior to making an investment decision.
Opinions and/or example trades/securities represent our understanding of markets both current and historical and are used to promote Aegon Asset Management's investment management capabilities: they are not investment recommendations, research or advice. Sources used are deemed reliable by Aegon Asset Management at the time of writing. Please note that this marketing is not prepared in accordance with legal requirements designed to promote the independence of investment research, and is not subject to any prohibition on dealing by Aegon Asset Management or its employees ahead of its publication.
Fund Charges are taken from income but will be taken from capital where income is insufficient to cover charges, except the Aegon High Yield Global Bond Fund and Aegon Global Short Dated High Yield Climate Transition Fund where the fund charges are deducted from capital which has the effect of increasing income distributions but constraining capital growth.
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