Prudential High Yield Bond comment - Sep 12 - Fund Manager Comment29 Oct 2012
The All Bond Index gained 0.9% and the Inflation-Linked Bond Index gained 2.7%. Cash returned 0.5%.
The Fund achieved a total return of 0.8% for the month. This brings the year to date
performance of the Fund to 12.6%, slightly underperforming the All Bond Index of 13.1%. The Fund retains a neutral duration and an overweight credit position.
Prudential High Yield Bond comment - Jun 12 - Fund Manager Comment22 Aug 2012
The All Bond Index returned just over 3.3% in June, making nominal bonds the best performing of the local asset classes for the month.
Long bond yields, as reflected by ten year yields, surged almost 0.5% lower during the month to close yielding 7.9%. Ten year yields have not touched these levels since the lows experienced at the end of 2008 in the midst of the financial crisis.
Foreign demand for local bonds has been cited as one of the main drivers of the rally with foreign flows into the local market purportedly being the second highest on record.
Domestic inflation continues to moderate with May's inflation print at 5.7% surprising to the downside with the consensus expectation having been 5.9%.
The Fund retains a neutral duration position and a credit overweight.
Prudential High Yield Bond comment - Mar 12 - Fund Manager Comment28 May 2012
Long bonds ended the month slightly weaker at 8.01% from February's close of 7.92% having experienced a sharp sell off during the month where they touched 8.19% before recovering somewhat.
Despite the weaker yields the ALBI managed to post a positive return, albeit it only 0.1% for the month.
February's CPI print at 6.1% surprised to the downside with the market consensus expectation at 6.4%, with food inflation appearing to be the major contributor to the surprise.The MPC as expected kept rates on hold indicating it still expects CPI to remain within the target band throughout 2013.
The fund continues to maintain a small short duration position and a credit overweight.
Prudential High Yield Bond comment - Dec 11 - Fund Manager Comment22 Feb 2012
Long bonds ended the month yielding 8.08%, unchanged from November's close and virtually unchanged from where they started the year. 2011 was a year which saw long bond trade in a relatively narrow 0.5% range but with pronounced volatility within this range.
This volatility created a number of opportunities to implement active positions and December again afforded us the opportunity to implement a short duration position, meaning the fund is currently less sensitive to interest rate movements than its benchmark, the All Bond Index.
The funds overweight credit positioning contributed positively to its performance for the year and will continue to be a driver of performance in the year ahead