UCITS Funds

Payden Global Aggregate Bond Fund (PAGABUA ID)

Base Share Class: USD
  • Overview
  • Portfolio Statistics
  • Performance & Expenses
  • Fund Commentary
Investment Strategy

The Payden Global Aggregate Bond Fund invests in a range of fixed-income instruments across a variety of sectors, maturities, and currencies of denomination with a primary focus on investment-grade securities. The Fund combines top-down and bottom-up views across duration, country, credit, and foreign exchange markets. The Fund is actively managed against the Bloomberg Barclays Global Aggregate Index hedged into the base currency of the investor's chosen share class.

Fund Snapshot - 28 February 2023
Fund Inception Date May 28, 2021
Share Class Inception Date May 28, 2021
Ticker PAGABUA ID
ISIN Number IE00BMBRV223
Sedol Number BMBRV22
Fund Total Net Assets $135.2 million
Benchmark Bloomberg Global Aggregate Index USD Hedged
Currency Share Classes Available CAD, CHF, EUR, GBP, JPY, NOK, SGD, USD
Management Fee 0.30%
Total Expense Ratio 0.35%
Investment Minimum $1,000,000 initial

Unless otherwise indicated, all listed data represents past performance. There is no guarantee of future performance, nor are fund shares guaranteed. Funds are issued by Payden & Rygel Global, Ltd., which is authorised and regulated by the Financial Conduct Authority. The investment products and services of Payden & Rygel are not available in the United Kingdom to private investors. The value of an investment may fall as well as rise and an investor may get back less than the amount that has been invested. Income from an investment may fluctuate in value in money terms. Changes in rates of exchange may cause the value of an investment to go up or down.

Portfolio Characteristics - 28 February 2023
Fund Inception Date May 28, 2021
Share Class Inception Date May 28, 2021
Total Net Assets $135.2 million
Average Duration 6.3 years
Average Maturity 7.8 years
Yield to Maturity (hedged) 5.18%
Duration Breakdown
Years Percent of Portfolio
0-120%
1-317%
3-518%
5-714%
7-1013%
10+18%
Total 100%
Credit Breakdown
Credit Quality Percent of Portfolio
AAA41%
AA9%
A22%
BBB18%
BB and Below9%
Unrated1%
Total 100%
Sector Breakdown
Sector Percent of Portfolio
Governments/Cash48%
Corporates33%
Mortgage-Backed12%
Asset-Backed1%
Government Related1%
Other5%
Total 100%
Country Breakdown
Country Percent of Portfolio
United States53.4%
Euroland19.8%
Japan10.1%
United Kingdom4.2%
Canada4.1%
Australia2.0%
Switzerland1.1%
Mexico1.1%
Brazil0.8%
Scandinavia0.7%

Unless otherwise indicated, all listed data represents past performance. There is no guarantee of future performance, nor are fund shares guaranteed. Funds are issued by Payden & Rygel Global, Ltd., which is authorised and regulated by the Financial Conduct Authority. The investment products and services of Payden & Rygel are not available in the United Kingdom to private investors. The value of an investment may fall as well as rise and an investor may get back less than the amount that has been invested. Income from an investment may fluctuate in value in money terms. Changes in rates of exchange may cause the value of an investment to go up or down.


Total Returns
YTD 1 Year 3 Year 5 Year 10 Year Since Inception
Quarter-end (12/31/2022) -11.58% -11.58% N/A N/A N/A -6.94%
Month-end (2/1/2023) 2.50% -8.00% N/A N/A N/A -5.21%
Yearly Returns
2022-11.58%
20210.82%
Expenses
Management Fee 0.30%
Total Expense Ratio 0.35%

Unless otherwise indicated, all listed data represents past performance. There is no guarantee of future performance, nor are fund shares guaranteed. Funds are issued by Payden & Rygel Global, Ltd., which is authorised and regulated by the Financial Conduct Authority. The investment products and services of Payden & Rygel are not available in the United Kingdom to private investors. The value of an investment may fall as well as rise and an investor may get back less than the amount that has been invested. Income from an investment may fluctuate in value in money terms. Changes in rates of exchange may cause the value of an investment to go up or down.

Fund Commentary - 28 February 2023

MARKET
After a strong January, markets retraced many of their gains in February as investors grew fearful that inflation would not slow as expected and central banks would need to hold interest rates higher for longer. Equities decreased over the month, with the S&P 500 losing 2.4%, whilst US and European bond yields rose.
In the US, the Federal Reserve (Fed) began the month by slowing the pace of interest rate hikes. The committee increased the benchmark rate by 25 basis points (bps) to 4.75%. As the month progressed, data prints illustrated a strong economy and no signs of inflation easing. The nonfarm payroll headline figure printed much higher than expected at 517,000 (estimated: 188,000); meanwhile, the unemployment rate dropped. US retail sales accelerated by 3.0%, and consumer spending increased last month. To accompany these positive economic prints, the Consumer Price Index (CPI) remained robust, further fuelling the fear of persistent inflation. The combination of this data led investors to speculate that the Fed would need to keep rates higher for longer to fight sticky inflation. The 2-year to 10-year segment of the US Treasury curve reached its most inverted level in 42 years, at -0.89%, and the terminal interest rate priced by markets reached its highest point in the current cycle closing the month at 5.42%.
In Europe, the European Central Bank (ECB) increased interest rates by 50 bps bringing the deposit rate to 2.5%. The hike was as expected, and ECB President Christine Lagarde pre-committed to another 50 bps hike in March. The theme of a growing economy and persistent inflation was also present in Europe during February. Euro area unemployment remained at a record low level of 6.6%, whilst core CPI reached a record high of 5.2%. In the UK, the Bank of England also increased interest rates by 50 bps and dropped previous guidance that they would “respond forcefully” to inflationary pressures. The yield on the 10-year German Bund and UK Gilt increased by 36 bps and 49 bps, respectively, over the month.

OUTLOOK
Recent economic data has led markets to revise down their probabilities of seeing a recession in the very near future. Whilst we agree with this near-term repricing, we expect the global economy to enter a phase of slower growth but still elevated inflation as we progress into 2023, with risks biased to the downside for growth and to the upside for inflation. Although some inflation measures have started to move lower, the pace of deceleration has been slower than expected, and uncertainty around a timely return of inflation towards central banks’ targets is high. We expect policy rate increases to slow going forward but see a need for monetary policy settings to stay in restrictive territory for some time. As major central banks maintain their focus on returning inflation to target and guarding inflation expectations from becoming unanchored, we see risks biased towards an overtightening of monetary conditions, the magnitude of which should influence the depth and length of the upcoming slowdown.
Underlying government bond yields already reflect a large degree of tightening of financial conditions. Against this backdrop of increasing government bond yields, credit spreads have performed relatively well in 2023, moving tighter year-to-date. Given these tighter credit valuation levels, our expectations of volatile macroeconomics, and as we approach the end of the economic cycle, we favour a relatively conservative risk posture with a preference towards the higher quality and most liquid part of the fixed-income market. Thematically, we expect 2023 to see a greater level of divergence across regions, with the US economy seemingly better positioned to navigate the turbulences lying ahead whilst the euro area and the UK face greater challenges in terms of real income squeeze and a worse growth/inflation backdrop.
In duration space, we like to start adding some duration in markets where we believe monetary policy expectations might have gone too far, like the US. Although given the level of uncertainty around economic data and the strong momentum that has characterised rates markets in the last 12 months, we favour starting with modest position sizes. We would also like to start legging into steepener positions in some markets, given the latest price action and attractive levels of valuation. We maintain an underweight duration in Japan as we still like the risk-return profile offered by said position ahead of potentially more monetary policy changes from the Bank of Japan.
From a credit perspective, we hold a modest overweight to credit markets with a focus towards less cyclical sectors, lower beta, and highly liquid names. As we approach the end of the cycle and the economy slows, we expect downgrades to tick up in the coming year, highlighting the need for careful security selection. Within emerging-markets and absent positive developments on a potential resolution of the Ukraine/Russia conflict, we still favour issuers that are less exposed to the conflict. Within high yield, we maintain a preference towards shorter-dated and higher-quality securities with a bias towards energy issuers.
In currency space, 2022 saw a strong performance of the US dollar across most other currencies, taking the US dollar to what is generally described as rich valuation levels. Whilst US rates may be approaching the top end of this cycle, and the interest rate differential with other economies might stabilise or narrow going forward, our late-cycle view would still be consistent with a supportive environment for the US dollar. Given the mixed assessment across fundamentals and valuations, we maintain a broadly neutral position in the US dollar at this stage. Our favoured theme in currency is centred around a long Japanese position against higher beta currencies that are usually underperformers in a global economic slowdown.

Unless otherwise indicated, all listed data represents past performance. There is no guarantee of future performance, nor are fund shares guaranteed. Funds are issued by Payden & Rygel Global, Ltd., which is authorised and regulated by the Financial Conduct Authority. The investment products and services of Payden & Rygel are not available in the United Kingdom to private investors. The value of an investment may fall as well as rise and an investor may get back less than the amount that has been invested. Income from an investment may fluctuate in value in money terms. Changes in rates of exchange may cause the value of an investment to go up or down.