The Colchester Global Government Bond PIE Fund has retained a “5 IP” rating from Research IP, with a score of 4.31/5.
The Colchester Global Government Bond PIE Fund (“the Fund”) aims to generate income and increase the amount invested by investing in a globally diversified portfolio of government bonds and currencies. An associated objective is the preservation and enhancement of principal. The Fund may also use forward foreign exchange transactions (including non-deliverable foreign exchange transactions).
This Fund would suit an investor seeking a defensive allocation to fixed interest within a diversified portfolio. The Fund invests in global government bonds and currencies which are subject to movements (both positive and negative) in the prices of fixed interest securities of the underlying securities in the portfolio.
What is the Fund’s competitive advantage?
Qualitative Research Report and Data Tear Sheet
Research IP says
“The Fund should be part of the defensive allocation of a diversified portfolio, so the liquid aspect of the Fund must hold true, especially in times of stress when risk assets are not performing. The universe is inherently liquid when considered against other assets across the broader risk spectrum, and Research IP believes the Manager has demonstrated a consistent and repeatable process in ensuring the liquid nature of the Fund.”
“Research IP believes an active approach to fixed interest investment is prudent, and even more so in an environment of rising interest rates. There is potential for fragmentation risks as the normalization of interest rates has an uneven impact on different countries. A focus on fiscal strength and stability is important. Research IP believes the Manager has demonstrated this so far, and can continue to demonstrate the ability to manage these risks.”
“Generation of alpha is dependent on the Manager’s ability to forecast inflation (real value) consistently across different countries, and the ability to exploit deviations in the assessment of a currency’s fair value. Critical to this is fundamental research, particularly the Manager’s financial stability score.”
“The integration of ESG works more like a penalty. If a country is assessed as being riskier due to an ESG factor within the Financial Stability Score (FSS), then the optimiser will work it into the model by including a higher risk input for that country, and therefore more likely to have a lower weighting or no weighting at all in the final portfolio.“
Research IP, 10 October 2023
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Disclaimer, Disclosures and Warnings
Research IP strongly recommends this document and report be read in conjunction with the relevant Product Disclosure Statement. Research IP gives no warranty of accuracy or completeness of information in this document. Any information, opinions, views or recommendations are general information only and do not take into consideration any person’s particular financial situation or goals and therefore does not constitute financial advice. This document should not be relied upon as a substitute for financial advice from your financial adviser.
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