GLG Global Corporate Bond Fund

For institutional/professional investor and intermediary use only. Not for public distribution.
GLG Global Corporate Bond Fund
Fund Profile – Q1, 2013
Fund overview
Key team members
GLG Global Corporate Bond Fund (the ‘Fund’) is a long-only credit fund that
invests primarily in investment grade securities. Its principal aim is to achieve
long-term income and capital appreciation.
Jon Mawby
Portfolio Manager
Jon joined GLG in September 2012 to run the Global
Corporate and Strategic Bond Funds. Prior to that he spent
Key attributes
The Fund:
• is a traditional fixed income, duration-based product
• is managed by a core team comprising Jon Mawby (Portfolio Manager),
Steve Roth (Head of the GLG Credit platform) and David Charles (Risk Manager).
This team is supported by highly experienced credit asset managers and
analysts based around the globe
• has a global mandate allowing for full geographic diversification, which in turn
increases its access to sources of alpha and reduces exposure to systemic risk
almost 7 years at ECM Asset Management where he was
Lead Portfolio Manager focusing on multi-asset class credit
funds and a member of the Investment, Sector Strategy
and Peer Group Review Committees. Jon joined ECM in
2005 from Gartmore Investment Management, where he
was a portfolio manager and fixed income trader within the
Institutional Credit Group, working primarily on relative value
trading strategies. Prior to that Jon worked at Aviva Investors
and Goldman Sachs. He holds a BA (Hons) in Economics
from Durham University and is a CFA charterholder.
• employs a fundamental, research-driven approach to investing overlaid
with actively managed capital allocations between geographical regions
and sectors
• makes full use of the GLG equity and macro trading expertise which supports
and complements idea generation
• has a multi-layered risk management process at the core of the investment
process
• provides daily liquidity
Steve Roth
Head of the GLG Credit platform
Steve joined GLG in November 2005 to manage the
GLG Market Neutral and GLG Global Convertible Funds.
Prior to that he spent 7 years at Deutsche Bank where
he was a managing director and Head of the top ranked
European convertible business and subsequently
Co-Head of a proprietary convertible and capital structure
arbitrage group. Steve graduated from Cambridge
Why the GLG Global Corporate Bond Fund?
University in 1992 with an MA in Computer Science.
Performance
• Relative to its peer group (the IMA Global Bonds sector), the Fund has
consistently performed in the top quartile over the short, medium and long term
• On an absolute basis, the Fund has produced an annualised return of 11.92%1
since GLG took over the management of the Fund in June 2009
• Since June 2009 the Fund returned 51.15% vs. 44.47%1 for the benchmark
David Charles
Risk Manager
David joined GLG in June 2007 to risk manage the
GLG Market Neutral and GLG Global Convertible Funds.
Prior to this he spent 5 years at Deutsche Bank where
he was a managing director and Global Head of Capital
Compelling mandate
Management for Global Markets. David has a background
• The Fund invests in investment grade credit2
in trading and risk management having been Head of
• Global flexibility: the team has complete freedom across the spectrum
of investment grade debt instruments – as interest rates remain low and the
economic climate remains uncertain it is increasingly important to be able
to have global flexibility
• Geographic diversification aims to reduce risk and increases access
European Equity Risk Management at Deutsche Bank
and Head of Risk for Asia for GenRe and Royal Bank of
Scotland. David previously traded interest rate swaps,
options and exotics for Greenwich Natwest. David graduated
from Cardiff University in 1989 with a BSc in Economics.
to sources of alpha
Source: GLG database and Bloomberg. Benchmark: CG WGBI Non GBP --> Merrill Lynch Large Cap Corp GBP. Past performance is not a reliable indication of future returns.
1. Date range: 30 June 2009 to 28 February 2013. Performance of the retail share class GBP net of fees and income reinvested. 2. No more than 10% of the Fund’s assets invested will be invested
in non-investment grade debt securities.
1/5
Fund terms
Robust, transparent, repeatable investment process
• We believe that our focus on fundamental research combined with our
robust investment process results in the Fund having the potential to deliver
consistent out-performance over the longer term
Industry recognition
Launch date
16 April 1998
Name
• Recent independent research rankings3 placed the Fund 1st out of 31
GLG Global Corporate Bond Fund
(annualised return and Omega over the last five years) and 11th out of 49
(annualised return over the last three years)
• The UK based Sunday Telegraph4 named the Fund as the top performing unit
trust based on performance over five years5
Domicile
GLG Global Corporate Bond Fund is a sub-fund of
GLG Fixed Interest ICVC which is an investment company
with variable capital incorporated in England and Wales
Performance analysis
The GLG Global Corporate Bond Fund has performed well versus its peer group,
the IMA Global Bonds sector.
Regulator/listing
Financial Services Authority
30 June 2009 to 28 February 2013
GLG Global
CG WGBI Non GBP
Corporate Bond --> Merrill Lynch Large
1
Fund Class A
Cap Corp GBP
1 year
3 year p.a.
Annualised return since
June 2009 (since GLG took over
management of the Fund)
Fund administrator
IMA
Global Bonds
12.95%
11.54%
7.93%
7.22%
6.75%
5.04%
11.92%
10.55%
8.15%
BNY Mellon Fund Services (International) Ltd
Auditors
Ernst & Young LLP
Minimum investment
Retail: GBP 1,000,000
GLG Global Corporate Bond Fund – investment philosophy
Professional: GBP 500,000
The Fund’s philosophy is to:
• target outperformance above its benchmark
• have bottom-up credit analysis at the heart of the investment process
• maximise value and return in every trade
• take an active approach to portfolio management so as to maximise value
and returns
• leverage the GLG credit, equity and macro platform
• construct our portfolio so that it minimises exposure to country specific
systemic risk and provides diversification across geographies and sectors
Investment process
The team aims to optimise the risk/reward profile of the Fund by employing
a consistent, transparent and repeatable investment process that
combines insightful top-down asset allocation decision making with rigorous
bottom-up analysis and robust risk management.
The team’s investment style is fundamentally driven with a relative value mindset
and a focus on strong risk-adjusted returns.
Redemption notice period
1 business day.
For valid redemption applications received before 12
noon on a Business Day, the Shares redeemed will be
priced at a value calculated on that Business Day. For
valid redemption applications received after 12 noon on
a Business Day, the Shares redeemed will be priced at
a value calculated on the following Business Day.
Investment management fee
0.50% -1.25% per annum dependent on share class
Performance fee
No performance fee
Share classes
Class ‘Retail A Accumulation GBP’ Shares
Class ‘Retail B Income GBP’ Shares
Class ‘Professional C Accumulation GBP’ Shares
Class ‘Professional D Income GBP’ Shares
ISIN code
GB00B0118638
GB00B0118745
GB00B0118851
GB00B0118B85
Source: GLG database and Bloomberg. As at 28 February 2013. Past performance is not a reliable indication of future returns.
3. This claim is supported by an Independent research report generated by German company AbsolutResearch, November 2012 (based on data calculated to the end of October 2012).
4. The Sunday Telegraph is a UK based weekly newspaper. 5. The UK based Sunday Telegraph’s ‘Your money’ section, 27 October, 2012.
2/5
Fundamental bottom-up research is rigorously applied to each investment opportunity
All investment decisions are based on fundamental, bottomup analysis which is derived from a combination of proprietary
analytical tools and detailed credit selection. The team uses
several models to obtain theoretical prices which are then
compared to market trading prices to identify valuation anomalies.
Fundamental credit analysis
• Detailed balance sheet
and cash flow analysis by
GLG credit analysts
• Credit models designed by
those with extensive
experience working in
major investment banks
Macro overlay
In addition, investment ideas are verified in conjunction with
sell-side analysis and the views of other GLG specialists. Selected
positions are reviewed on a daily basis to ensure the desired
risk/reward profile is maintained.
Risk/strategy check point
• GLG macro specialists consulted
• Issuer concentration
• Assessment of GDP forecasts,
sector outlook, economic cycle,
interest rates forecasts
• Asset class exposure
• External expert consultants used
to support thematic positioning
Execution of trade
• Portfolio manager ensures best
execution of trade taking into
account liquidity and timing
• Industry concentration
• Portfolio sensitivity analysis
• One to one meetings with
management teams of issuers
• GLG industry experts
consulted e.g. financials team
• Third party research referenced
Amba Consultant analysts
Asset allocation process
The team is able to leverage the views of GLG’s macro specialists
Sudi Mariappa and Jamil Baz in their top-down allocation decision
making. The core credit team meets regularly to discuss risk
budgeting and macro positioning, including regional rating and
sector allocation, whilst also undertaking stress testing and
scenario analysis. Together with bottom-up valuation, this enables
the core team to identify the most attractive opportunities in global
investment grade credit markets.
In addition, bespoke yield curve and interest rate analysis and
input from leading external economists, results in successful
top-down allocation decision making.
The core team meet weekly to decide asset allocation:
Inputs
• Internal risk and
portfolio data
• Discussions with
GLG macro specialists
• Fundamental trend
analysis
• Technical picture
assessment regarding
fund flows, liquidity
and issuance
• External research
Trigger
• Stress test outcome
• Major macro shock
• Country specific risk profile
changes
• Relative risk-adjusted value
across sub-asset classes
Scenario
assessment
Action
• Core team asses portfolio
portfolio positioning and
options to adjust allocations
• Proactively adjust
asset class allocation
to reflect new scenario
• Risk models and metrics
used to support decision
making process
• Disciplined approach
to executing trades
Revaluation
• Constantly revaluate
portfolio allocations
• Deterioration of certain
sectors
• Credit cycle assessment
• Rates expectations
People:
Jon Mawby
Steve Roth
David Charles and
Macro experts at GLG
Jon Mawby
Steve Roth
and David Charles
Jon Mawby
and Steve Roth
Jon Mawby
and Steve Roth
Schematic illustration. Any descriptions involving investment process, portfolio characteristics, investment strategies, goals or risk management are provided for illustration purposes only, are not
complete, will not apply in all situations, may not be fully indicative of any present or future investments and may be changed at the discretion of the investment manager. No representation is made
that the investment manager’s or the Fund’s investment process, investment strategies, goals or risk management techniques will or are likely to be achieved or successful.
3/5
Risk management
Tactical benefits of global corporate bonds
The Fund has a multi-layered risk management process which is
led by David Charles, the dedicated Risk Manager of the team. In
addition, the Fund benefits from the oversight and expertise of an
independent risk management team, led by David Benjamin.
Versus equities, corporate bonds offer:
Two discrete functions enable the risk objectives to be met:
• lower volatility – over the past 15 years investment grade
• hard coupons versus soft dividends
• a higher (less subordinated) position in the capital structure
corporate bonds6 have returned 154.21% with an average
annual volatility of 7.20% vs. equities7 which returned 37.05%
with an average annual volatility of 16.56%8
Risk controls – classical risk controls are implemented in
accordance with explicit constraints
Active risk management – ensures the alignment of risk
with investment conviction and manager strengths
• positive fundamentals: deleveraging over the last 18 months
has improved balance sheets at investment grade corporates
which, combined with a benign low growth environment, suits
the asset class
The benefits of a global portfolio: global versus
regional corporate bonds
• Investing in a portfolio of global corporate bonds compared to
regionally focused bonds can allow access to higher yields
15 year performance of bonds versus equities
28 February 1998 to 28 February 2013
• Allows greater geographic and industry diversification
3000
• Reduces exposure to country specific systemic risk
2500
• Historically a globally diversified portfolio has produced superior
2000
returns when compared to regional corporate bonds, with the
Citigroup WorldBIG Corporate USD Hedged Index returning
77.67% versus the Citigroup EuroBIG Corporate Index returning
65.79% and the Citigroup USBIG Index US Issuers returning
64.90% over the last ten years (as at 28 February 2013)
Bonds (Merrill Lynch Global Large
Cap Corporate Index USD)
1500
1000
Equities (MSCI World Price Index USD)
500
0
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9
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6
4
8
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10 b 11 b 12 b 13
07
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b 0 eb 0 eb 0 eb 0 eb 0 eb
b 9 eb 9 eb 0 eb
b 0 eb 0 eb
Fe
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F
F
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Track record
The Fund has produced an annualised return of 11.92%9 since June
2009, when GLG took over management (from Société Générale).
30 June 2009 to 28 February 2013
1,550
1,500
GLG Global Corporate Bond Fund Class A
1,450
1,400
1,350
1,300
1,250
1,200
1,150
1,100
1,050
CG WGBI Non GBP --> Merrill Lynch Large Cap Corp GBP
1,000
Ju
9
9 10
9
10 p 10 c 10 r 11 n 11 p 11 c 11 r 12 n 12 p 12 c 12 r 13
n 0 ep 0 ec 0 ar un
a Ju
a Ju
a
J
M
Se De M
Se De M
Se De M
S
D
GLG Global Corporate Bond Fund Class A
Jan
Feb
2013
2.03%
3.40%
2012
1.38%
1.83%
2011
-0.34%
-0.25%
2.17%
-0.08%
2010
1.30%
4.68%
3.78%
-0.04%
2009
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Annual
return
-0.25%
-1.72%
2.26%
0.46%
1.58%
0.57%
0.49%
1.90%
1.15%
0.47%
0.08%
1.71%
-1.48%
-3.45%
-1.68%
0.57%
-1.35%
2.43%
-1.82%
-1.14%
-2.89%
3.11%
2.53%
2.99%
1.98%
-3.79%
1.20%
14.16%
5.42%
3.13%
5.14%
-0.93%
2.76%
-0.62%
15.65%10
5.50%10
10.52%
Source: GLG database and Bloomberg. Past performance is not a reliable indication of future returns.
6. Represented by the Merrill Lynch Global Large Cap Corporate Index (USD). 7. Represented by the MSCI World Price Index (USD). 8. Date range: 28 February 1998 to 28 February 2013.
9. Date range: 30 June 2009 to 28 February 2013. Performance of the retail share class GBP net of fees and income reinvested. 10. Part year.
4/5
Important information
This document has been prepared by GLG Partners UK Ltd (‘GLG’), 1 Curzon Street, London W1J 5HB, a member of the Man Group. GLG Partners UK Ltd is authorised and regulated by
the Financial Services Authority (‘FSA’).
Investment into the Fund is provided by GLG Partners Investment Funds Limited which is authorised and regulated by the Financial Services Authority.
This document is provided to you for information purposes only and should not be used or considered as an offer or a solicitation to sell or buy the securities mentioned in it. Any decision by an
investor to buy shares in the Fund must be made solely on the basis of the information and terms contained in the Fund’s Prospectus. Nothing in this document should be construed as investment
advice, or as an opinion regarding the appropriateness or suitability of any investment. This document does not take into account the particular investment objectives, restrictions, financial or tax
situation or needs of any specific client. No representation is made that the objectives or goals of any investment fund will be met or that an investment will be profitable or will not incur losses.
Performance data of the Fund is not based on audited financial data. Past performance is not a guide to future performance and the value of investments and the income derived from those
investments can go down as well as up. Future returns are not guaranteed and a loss of principal may occur. Performance may be affected by economic and market conditions. Opinions expressed
herein may not necessarily be shared by all personnel of GLG Partners UK Ltd and its affiliates and are subject to change without notice. There can be no guarantee that the events or circumstances
envisaged in any forward looking statement will occur.
The Fund currently has or intends to have more than 35% of its total holdings in bonds issued by or guaranteed by World Bank, European Investment Bank, International Financing Corp, KFW,
Eurofima, Inter-American Development Bank and governments of the following States: United Kingdom, United States, Canada, Norway, Greece, Japan, Australia, Spain, Finland, Germany, Holland,
Portugal, France, Belgium, Ireland, Sweden, Austria, Italy, Denmark, New Zealand, Switzerland, Poland, Hungary and Czech Republic. In order to fulfil the Fund’s objectives the manager may invest
principally in units of other collective investment schemes, bank deposits, derivatives contracts designed with the aim of gaining short term exposure to an underlying stock or index at a lower cost
than owning the asset, or assets aiming to replicate a stock or debt securities index. Full details of the Fund objectives, investment policy and risks are located in the Prospectus which is available
with the Key Investor Information Document in English and an official language of the jurisdictions in which the Fund is registered for public sale, together with the Report and Accounts of the UCITS
all of which are available free of charge from www.man.com.
The information is furnished as of the date shown or cited; no representation is made with respect to its accuracy, completeness or timeliness. All information is based on GLG Partners UK Ltd
calculations unless otherwise stated. No part of this material may be (i) copied, photocopied or duplicated in any form, by any means, or (ii) redistributed to any person without GLG’s prior written
consent, except to those of your agents and employees responsible for its evaluation. All rights reserved, GLG Partners UK Ltd (2013).
UK/13/0195-P
Important considerations prior to making an investment
Potential investors should note that investments in financial securities can involve significant risk and may result in losses. The risks outlined below are not exhaustive and potential investors should
review the Prospectus in its entirety for a more detailed description of the risks associated with an investment in the Fund, and, where appropriate, seek advice from their independent financial adviser
before making an investment.
Potential investors should consider the following risks*:
(i) Market Risk – the Fund is subject to normal market fluctuations and the risks associated with investing in international securities markets and therefore there can be no assurances that capital
appreciation will occur.
(ii) Counterparty Risk – the Fund will be exposed to credit risk on counterparties with which it trades in relational to non-exchange traded instruments such as futures and options as well
as any other ‘over-the-counter’ transaction. Such instruments are not afforded the same protection that may apply to participants trading instruments on an organised exchange.
(iii) Currency Risk – the value of investments designated in another currency may rise and fall due to exchange rate fluctuations. Adverse movements in currency exchange rates may result
in a decrease in return and a loss of capital. It may not be possible or practicable to successfully hedge against the currency risk exposure in all circumstances.
(iv) Interest Rate Risk – fluctuations in interest rates may significantly affect the value of investments in the Fund and hence detract from Fund performance.
(v) Political and/or Regulatory Risk – the value of investments may be affected by uncertainties such as international political developments, changes in government policies, taxation and other
developments in applicable laws.
*Please refer to the Prospectus of the Fund for a detailed description of the risks and fees in relation to the investment.
5/5