It was September 27, 2013, when the NEI Global Total Return Bond Fund was launched. Ten years ago, the world was a different place—rates were lower, inflation wasn’t running hot, and investors were facing different challenges.
It was September 27, 2013, when the NEI Global Total Return Bond Fund was launched. Ten years ago, the world was a different place. Central banks’ main rates were sensibly lower, inflation wasn’t running hot, and investors were facing different challenges.
Since then, global bond yields have been on a volatile path, culminating in a huge resetting of interest rates in 2022, due to a synchronized global tightening cycle and the Federal Reserve hiking rates at the fastest pace in modern history. The bond market suffered a significant meltdown as central banks throughout the developed and emerging world hiked rates aggressively to fight surging inflation, on the back of supply-demand imbalances, a resilient economy, and a spike in commodity prices.
Since the inception of the Fund, we have been through a prolonged period of quantitative easing followed by quantitative tightening by major central banks, a severe global Covid crisis, and a major escalation in geopolitical tension with the war in Ukraine.
Despite rising yields and bond markets experiencing periods of elevated volatility, NEI Global Total Return Bond Fund (Series F) has:
- Generated excess returns versus the benchmark over both the short and long term
- Produced a cumulative return of 25.7% over the decade
- Been rated four stars by Morningstar across three, five, and ten-year time periods
- An overall four-star Morningstar rating
- Demonstrated that ‘going global’ for fixed income can add value over time
Such results re-affirm how our flexible strategy, favoring liquid and high-quality securities within a diversified portfolio, was able to produce a robust positive performance throughout the cycle with an information ratio3 of 0.47% and a tracking error well below the maximum risk budget.
In our view, the future is shaping up to be supportive for bonds and the market environment presents constructive opportunities for the portfolio in both the short and long term, but we remain cautious overall.
With current global investment grade, fixed income yields at higher levels, we have built a portfolio of high quality, liquid assets that is offering an attractive 6.5% yield to maturity4.
As monetary policy enters a new phase and with most rate hikes for this cycle likely behind us, we view a more positive outlook for fixed-income markets. It is still likely to be a bumpy ride, with a volatile global economy and rising political uncertainty over the coming year. High asset quality, liquidity, and our nimble and flexible investment approach should help us navigate these challenges ahead.
“As proud partner of NEI, we look forward to this continued partnership and invite you to explore this unconstrained, go anywhere, global fixed-income mandate.” – Amundi
For more information about NEI Global Total Return Bond Fund contact your NEI Sales Representative or visit neiinvestments.com