UCITS Funds

Payden Global Short Bond Fund (PARISBI ID)

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

Payden's bond funds aim to outperform passive strategies in both rising and falling interest rate environments. The Payden Global Short Bond Fund invests in a full range of (mostly investment grade) debt securities with a view to outperforming short-dated global governments, whilst at the same time outperforming bank deposits and other money market securities, including money market funds.

Fund Snapshot
Fund Inception Date Jul 22, 1999
Share Class Inception Date Jul 22, 1999
Ticker PARISBI ID
ISIN Number IE0008461414
Sedol Number 0846141
Fund Total Net Assets $631.1 million
Benchmark FTSE World Government Bond 1-3 Year Index USD Hedged
Currency Share Classes Available CAD, CHF, EUR, GBP, JPY, NOK, SEK, 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
Fund Inception Date Jul 22, 1999
Share Class Inception Date Jul 22, 1999
Total Net Assets $631.1 million
Average Duration 1.8 years
Average Maturity 1.6 years
Yield to Maturity (hedged) 5.91%
Duration Breakdown
Years Percent of Portfolio
0-119%
1-375%
3-56%
5-7-1%
7+1%
Total 100%
Credit Breakdown
Credit Quality Percent of Portfolio
AAA34%
AA11%
A30%
BBB20%
BB and Below4%
Unrated1%
Total 100%
Sector Breakdown
Sector Percent of Portfolio
Governments/Cash66%
Corporates24%
Asset-Backed4%
Mortgage-Backed2%
Other4%
Total 100%
Country Breakdown
Country Percent of Portfolio
United States39.1%
Euroland31.4%
Japan16.1%
United Kingdom3.5%
Scandinavia1.2%
Canada1.0%
Switzerland0.9%
S.Africa0.8%
Bermuda0.8%
Cayman Islands0.6%

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) -3.37% -3.37% -0.50% 0.70% 1.08% 2.07%
Month-end (12/31/2022) -3.37% -3.37% -0.50% 0.70% 1.08% 2.07%
Yearly Returns
2022-3.37%
2021-0.22%
20202.17%
20194.29%
20180.81%
20172.15%
20161.68%
20151.07%
20141.34%
20131.01%
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

MARKET
Despite early signs of inflation cooling, market sentiment weakened, with risk assets generally selling off on the month. Much of this sell-off can be attributed to hawkish central bank rhetoric, the Bank of Japan's change in yield control limits, and a resurgence in COVID cases in China. Equities decreased over the month whilst global government bond yields rose.
In the US, the month began with economic prints that continued to illustrate a robust economy and left investors fearing persistently high inflation. The Nonfarm Payroll report showed that the US economy added 263 thousand (estimated: 220 thousand) jobs in November; additionally, the report showed sharp revisions upward in October's figures. This print left the market questioning if the Federal Reserve (Fed) would slow interest rate hikes anytime soon. Soon after, the Producers Purchasing Index (PPI) printed higher than expected at 7.4% (estimated: 7.2%). Despite this, the Consumer Price Index (CPI) surprised to the downside for the second month in a row, which briefly increased market resiliency mid-month as markets hoped "peak inflation" was behind us. Soon after the CPI was released, the Fed raised interest rates by 50 basis points (bps) as expected, downshifting from four consecutive 75 bps hikes. However, the optimism brought on by lower-than-expected CPI and the downshift in hikes was quickly quelled by hawkish comments made by Jerome Powell and other officials following the rate announcement. 10-year US Treasury yields closed the month up by 27 bps, and the S&P 500 lost 5.9% in December.
European sentiment began hopeful as eurozone inflation decelerated from 10.6% in October to 10% in November. This print, combined with last month's country-level CPI downshifts, prompted investors to price out the chances of a 75 bps European Central Bank (ECB) interest rate hike and instead favour a 50 bps hike. Consistent with these expectations, the ECB increased borrowing rates to 2.5% (+50 bps). ECB’s President Christine Lagarde delivered a very hawkish message following the decision pointing at persistently high inflation, further rate hikes, and quantitative tightening beginning in March 2023. German Bund yields rose by 64 bps over the month, and the Stoxx 600 fell by 3.44%.
In Asia, the Bank of Japan announced in a surprise move that Japan's 10-year government bond yields would now be able to rise to 0.5%, having previously been limited to 0.25%. This news contributed to global yield increases this month, and the Japanese Yen saw its largest daily gain of the 21st century against the US Dollar (+3.93%). Furthermore, the Chinese government abruptly abandoned COVID-zero policies after last month's protests. Initially, markets received this news favourably; yet, as the month progressed and COVID cases ticked up, concerns mounted over the risk of new variants.

OUTLOOK
While the probability of some extreme risk events has arguably lessened recently, we expect 2023 should be a challenging balancing act for policy makers and the global economy. We see the global economy entering a phase of slower growth and still elevated inflation with risks biased to the downside for growth and upside for inflation. Central to our expectations are the questions of how rapidly is inflation going to slow and at what level will inflation settle? As we enter 2023, the direction of travel of inflation is expected to be lower, as some aspects of inflation normalise (energy and food related). However stickier parts of inflation are still posing a threat to a timely return of inflation towards central banks’ targets. We expect policy rate increases to slow going forward but see a need for monetary policy settings to stay in restrictive territory for potentially a longer period of time than currently priced in. 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 will influence the depth and length of the upcoming slowdown.
On the flip side of this rather challenging outlook, underlying government bond yields and credit spreads are already reflecting a large degree of overtightening risk and pessimism regarding growth. Notwithstanding the current level of valuations, given what we think is still a high level of uncertainty and as we approach the end of the economic cycle, we generally 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 laying ahead whilst the euro-area and the UK face greater challenges in terms of real income squeeze and a worst growth/inflation backdrop.
Against this backdrop, we favour to enter the year with a relative duration position between the US and euro-area as we see scope for German bonds to underperform US Treasuries. We also have a bias for underweight duration positions at the periphery of Europe. 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 enter the year with a relatively modest overweight to credit markets with a focus towards less cyclical sectors, lower beta and higher liquid names. As we approach the end of the cycle and the economy slows, we expect downgrades to tick up in the coming year which highlight 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.