Russell International Bond $A Hedged A aims to provide a total return, before costs and tax, higher than the Fund’s benchmark over the medium term by providing exposure to a diversified portfolio of predominantly fixed income securities denominated in foreign currencies and largely hedged into Australian dollars.
The Russell Investments International Bond Fund (AUD hedged) narrowly underperformed the benchmark in August.
Interest rates positioning detracted from performance (in aggregate) over the period, including an overweight to shorter-dated UK gilts and an overweight to US Treasuries. Active currency positioning also weighed on returns, including a short Chinese renminbi position and a long Japanese yen exposure. Partly offsetting this was a long US dollar position. Performance was further impacted by our credit positioning, including overweights to US high-yield industrials and European high-yield and investment-grade financials. Positioning within the hard currency emerging markets debt sector also impacted performance over the period; notably overweights to European and Latin American investment-grade debt. At the manager level, BlueBay, credit specialist Western Asset Management and the Russell Investments Integrated Governments Strategy all underperformed their respective benchmarks in August; the latter impacted in part by an overweight to longer-dated US Treasuries. In contrast, both the Russell Investments Intelligent Credit Strategy and corporate credit specialist Schroders outperformed. In terms of overall positioning, the Fund maintains a long duration exposure versus the benchmark, with overweights to US Treasuries and UK gilts and an underweight to Japanese government bonds. Credit positioning remains below strategic levels, with a tactical underweight in place. This tactical underweight reflects our view that credit spreads will widen as the lag effects of interest rate hikes feed into markets.
What is Russell International Bond $A Hedged A Russell International Bond $A Hedged A is an Managed Funds investment product that is benchmarked against Global Aggregate Hdg Index and sits inside the Fixed Income - Bonds - Global Index. Think of a benchmark as a standard where investment performance can be measured. Typically, market indices like the ASX200 and market-segment stock indexes are used for this purpose. The Russell International Bond $A Hedged A has Assets Under Management of 1.09 BN with a management fee of 0.6%, a performance fee of 0 and a buy/sell spread fee of 0.19%.
How has the investment product performed recently?
The recent investment performance of the investment product shows that the Russell International Bond $A Hedged A has returned 1.07% in the last month. The previous three years have returned -2.53% annualised and 4.68% each year since inception, which is when the Russell International Bond $A Hedged A first started.
How is risk measured in this investment product?
There are many ways that the risk of an investment product can be measured, and each measurement provides a different insight into the risk present. They can be used on their own or together to perform a risk assessment before investing, but when comparing investments, it is common to compare like for like risk measurements to determine which investment holds the most risk. Since Russell International Bond $A Hedged A first started, the Sharpe ratio is NA with an annualised volatility of 4.68%. The maximum drawdown of the investment product in the last 12 months is -2.45% and -17.57% since inception. The maximum drawdown is defined as the high-to-low decline of an investment during a particular time period.
What is the relative performance of the investment product?
Relative performance is what an asset achieves over a period of time compared to similar investments or its peers. Relative return is a measure of the asset's performance compared to the return to the other investment. The Russell International Bond $A Hedged A has a 12-month excess return when compared to the Fixed Income - Bonds - Global Index of 0.83% and 0.04% since inception.
Does the investment product produce Alpha over its Peers?
Alpha is an investing term used to measure an investment's outperformance relative to a market benchmark or peer investment. Alpha describes the excess return generated when compared to peer investment. Russell International Bond $A Hedged A has produced Alpha over the Fixed Income - Bonds - Global Index of NA% in the last 12 months and NA% since inception.
What are similar investment products?
For a full list of investment products in the Fixed Income - Bonds - Global Index category, you can click here for the Peer Investment Report.
What level of diversification will Russell International Bond $A Hedged A provide?
Russell International Bond $A Hedged A has a correlation coefficient of 0.81 and a beta of 1.14 when compared to the Fixed Income - Bonds - Global Index. Correlation measures how similarly two investments move in relation to one another. This establishes a 'correlation coefficient', which has a value between -1.0 and +1.0. A 100% correlation between two investments means that the correlation coefficient is +1. Beta in investments measures how much the price moves relative to the broader market over a period of time. If the investment moves more than the broader market, it has a beta above 1.0. If it moves less than the broader market, then the beta is less than 1.0. Investments with a high beta tend to carry more risk but have the potential to deliver higher returns.
How do I compare the investment product with its peers?
For a full quantitative report on Russell International Bond $A Hedged A and its peer investments, you can click here for the Peer Investment Report.
How do I compare the Russell International Bond $A Hedged A with the Global Aggregate Hdg Index?
For a full quantitative report on Russell International Bond $A Hedged A compared to the Global Aggregate Hdg Index, you can click here.
Can I sort and compare the Russell International Bond $A Hedged A to do my own analysis?
To sort and compare the Russell International Bond $A Hedged A financial metrics, please refer to the table above.
Has the Russell International Bond $A Hedged A been independently verified by SMSF Mate?
This investment product is in the process of being independently verified by SMSF Mate. Once we have verified the investment product, you will be able to find more information here.
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Comments from SMSF Mates
SMSF Mate does not receive commissions or kickbacks from the Russell International Bond $A Hedged A. All data and commentary for this fund is provided free of charge for our readers general information.
Performance Commentary - August 31, 2023 The Russell Investments International Bond Fund (AUD hedged) narrowly underperformed the benchmark in August.
Interest rates positioning detracted from performance (in aggregate) over the period, including an overweight to shorter-dated UK gilts and an overweight to US Treasuries. Active currency positioning also weighed on returns, including a short Chinese renminbi position and a long Japanese yen exposure. Partly offsetting this was a long US dollar position. Performance was further impacted by our credit positioning, including overweights to US high-yield industrials and European high-yield and investment-grade financials. Positioning within the hard currency emerging markets debt sector also impacted performance over the period; notably overweights to European and Latin American investment-grade debt. At the manager level, BlueBay, credit specialist Western Asset Management and the Russell Investments Integrated Governments Strategy all underperformed their respective benchmarks in August; the latter impacted in part by an overweight to longer-dated US Treasuries. In contrast, both the Russell Investments Intelligent Credit Strategy and corporate credit specialist Schroders outperformed. In terms of overall positioning, the Fund maintains a long duration exposure versus the benchmark, with overweights to US Treasuries and UK gilts and an underweight to Japanese government bonds. Credit positioning remains below strategic levels, with a tactical underweight in place. This tactical underweight reflects our view that credit spreads will widen as the lag effects of interest rate hikes feed into markets.
Performance Commentary - July 31, 2023 The Russell Investments International Bond Fund (AUD hedged) outperformed the benchmark in July.
Interest rates positioning contributed positively to performance (in aggregate) over the period, including an overweight to shorter-dated UK gilts and an underweight to Japanese government bonds. Partly offsetting these positions was an overweight to US Treasuries, which underperformed in July. Our long-held overweight to credit also added value, including overweights to European and UK high-yield and investment-grade debt. Positioning within the hard currency emerging markets debt sector added further value over the period; notably overweights to European and Latin American investment-grade debt. In contrast, active currency positioning detracted from overall performance in July. This included a short Swiss franc position and a long Japanese yen exposure. At the manager level, BlueBay was the best performer for the month, benefiting in part from overweights to two- and three-year UK gilts. Credit specialist Western Asset Management also performed well, while corporate credit specialist Schroders, the Russell Investments Intelligent Credit strategy and the Russell Investments Integrated Governments strategy all underperformed.
In terms of overall positioning, the Fund maintains a long duration exposure versus the benchmark, with overweights to US Treasuries and UK gilts and an underweight to Japanese government bonds. Credit positioning remains below strategic levels, with a tactical underweight in place. This tactical underweight reflects our view that credit spreads will widen as the lag effects of interest rate hikes feeds into markets.
Performance Commentary - June 30, 2023 The Russell Investments International Bond Fund (AUD hedged) underperformed the benchmark in the June quarter.
Interest rates positioning detracted from performance (in aggregate) over the period, including overweights to UK gilts and Canadian government bonds. Overweights to Australian government bonds and shorter-duration US Treasuries also weighed on returns; though this was partly offset by an underweight to five-year US Treasuries. An overweight to German bunds also added value. In terms of active currency positioning, a long Japanese yen position and short Australian dollar, Swiss franc and British pound positions impacted performance over the period, while a long US dollar position added value. Meanwhile, credit positioning had no material impact on overall returns in the second quarter. Whilst the Fund benefited from an overweight to US high-yield debt, this was offset by an underweight to hard currency emerging markets debt.
In terms of overall positioning, the Fund maintains a long duration exposure versus the benchmark, with overweights to US Treasuries and UK gilts and an underweight to Japanese government bonds. Credit positioning remains below strategic levels, with a tactical underweight in place. This tactical underweight reflects our view that credit spreads will widen as the lag effects of interest rate hikes feeds into markets.
Performance Commentary - May 31, 2023 The Russell Investments International Bond Fund (AUD hedged) underperformed the benchmark in May.
Interest rates positioning detracted from performance over the period (on aggregate). An underweight to Japanese government bonds weighed on returns, as did an overweight to UK gilts. Yields on UK gilts jumped as rate hike expectations increased in the wake of disappointing inflation data. In the US, an overweight to shorter duration Treasuries impacted performance; though this was partly offset by an underweight to five-year issues, which added value. Credit positioning contributed positively to overall performance in May; notably our exposures to European investment-grade and hard currency emerging markets debt. Meanwhile, active currency positioning had a relatively neutral impact on returns. Whilst the Fund benefited from long US dollar and short Swiss franc positions, these were offset by short euro and long Japanese yen exposures. At the manager level, BlueBay, corporate credit specialist Schroders and the Russell Investments Integrated Governments strategy all underperformed in May. In contrast, credit specialist Western Asset Management and the Russell Investments Intelligent Credit strategy both outperformed; the latter benefiting in part from its exposure to US investment-grade debt. Moving forward, the Fund is slightly long duration versus the benchmark, which is below strategic levels. Credit risk also remains below strategic levels, with a tactical underweight in place amid current, heightened market volatility.
Performance Commentary - April 30, 2023 The Russell Investments International Bond Fund (AUD hedged) performed in line with the benchmark in April. Active currency positioning contributed positively to performance over the period. This included a long euro position; the shared currency rising against its US counterpart on the back of easing European recession fears. Partly offsetting this euro exposure were a long Japanese yen position and a short Swiss franc position. Credit positioning also added value in April; notably overweights to European and UK credit.
An underweight to US securitised credit was also positive for the month. In contrast, interest rates positioning weighed on overall fund performance. This included an (aggregate) overweight to US Treasuries. However, the Fund did benefit from overweights to select US government issues; notably two- and 10-year US Treasuries. In terms of overall positioning, the Fund remains modestly long duration versus the benchmark. We are currently overweight US Treasuries and German Bunds, while underweight Japanese government bonds.
The Fund’s credit risk is below strategic levels with a tactical underweight in place amid current, heightened market volatility. At the manager level, corporate credit specialist Schroders and the Russell Investments Intelligent Credit strategy outperformed their benchmarks over the period; the latter benefiting in part from an overweight to US investment-grade financials. In contrast, BlueBay, credit specialist Western Asset Management and the Russell Investments Integrated Governments strategy all underperformed in April.
Performance Commentary - March 31, 2023 The Russell Investments International Bond Fund (AUD hedged) narrowly underperformed the benchmark in the March quarter. Interest rates positioning detracted from fund performance (in aggregate) over the period. This included an overweight to German bunds and an underweight to Japanese government bonds.
Partly offsetting these positions was an overweight to US Treasuries, which performed well amid the recent disruption to the US banking sector. In terms of active currency positioning, a long US dollar position added value (in aggregate) in the first quarter; though this was offset by a long Japanese yen exposure. Meanwhile, credit positioning added value over the period; notably an overweight to European hard currency emerging markets debt. The Fund also benefited from an underweight to US securitised credit.
Performance Commentary - February 28, 2023 The Russell Investments International Bond Fund (AUD hedged) outperformed the benchmark in February. However, the Fund did deliver negative absolute returns for the month.
Active currency positioning contributed positively to performance over the period; notably a long US dollar (USD) position. The USD made good gains amid US rate hike expectations and the currency’s perceived ‘safe haven’ qualities. A short Australian dollar position also added value. Partly offsetting these positions were long Japanese yen and Norwegian krone exposures. Credit positioning added further, albeit modest, value in February. This included an underweight to US investment-grade debt and overweights to European investment-grade and high-yield debt. An underweight exposure to securitised credit was also positive for the month. In contrast, interest rates positioning weighed on overall fund performance; notably an overweight to shorter-dated US Treasuries. This positioning was partly offset by underweight exposures to German bunds and UK gilts. At the manager level, corporate credit specialist Schroders and the Russell Investments Intelligent Credit strategy outperformed their benchmarks over the period; the latter benefiting in part from underweights to US investment-grade industrials and utilities. In contrast, BlueBay, credit specialist Western Asset Management and the Russell Investments Integrated Governments strategy all underperformed in February.
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