Objective

Seeks income-producing instruments: European government and high quality European corporate bonds

Strategy

Diversify across investment grade short-term fixed-income securities, primarily direct government obligations; these may include discount and zero coupon instruments, money market funds and exchange-traded government futures contracts and forward currency exchange contracts for the purposes of managing portfolio duration, yield curve positioning or trading execution on a more cost-effective basis

Fund Facts
Asset Manager
  • ARCA Fondi SGR SpA, Milan, Italy(Since 1/1/95)
Benchmark Bloomberg Barclays Euro Aggregate: 80 % Treasury (1-3 Yr) Index / 20% Corporate (1-3 Yr) Index
Fund Inception Date May 6, 2009
Mimimum Investment €50,000
Expense Ratio 0.45%
ISIN IE00B3R5XB01

Additional Facts

Effective June 1, 2017, the benchmark for the European Short Bond Fund was changed to the 80% Bloomberg Barclays Euro Aggregate Treasury (1-3 Yr) Index/20% Bloomberg Barclays Euro Aggregate Corporate (1-3Yr) Index. For periods prior to June 1, 2017, the applicable benchmark was the Bloomberg Barclays European Government 1-3 Year Term Index.

Annual Average Total Returns
(%) as of 31/03/2020

Trailing 3
Months
1
Yr
3
Yrs
5
Yrs
10
Yrs
Since
Inception
Inception
Date
European Short-Term Government Bond Fund -0.87 -0.92 -0.50 -0.36 0.91 1.02 5/5/2009
BB Euro Aggregate: 80 % Treasury (1-3 Yr) / 20% Corporate (1-3 Yr) Index -0.85 -0.62 -0.12 0.08 1.36 1.53

Characteristics as of 31/03/2020

Statistics Fund Index
Average Maturity 1.8 years 1.9 years
Effective Duration 1.7 years 1.8 years
Yield to Maturity 0.1% 0.1%
Current Yield 1.7% 1.9%
Average Credit Quality A- A
# of securities 115 758
Fund Size € 50.2MM
Credit Quality Fund Index
AAA/Aaa 17.6 20.1
AA/Aa 28.1 27.2
A 5.2 8.2
BBB/Baa 48.5 44.2
< BBB/BAA 0.6 0.2
Effective Duration Fund Index
0 - 1 Years 12.7 4.1
1 - 3 Years 86.5 95.9
3 - 5 Years 0.8 0.0
5 - 7 Years 0.0 0.0
Country Exposure Fund Index
France 20.8 20.5
Germany 13.6 17.5
Italy 28.7 24.2
United Kingdom 2.4 2.4
Japan 0.0 0.2
Canada 0.0 0.2
United States 1.9 3.2
Other Developed Europe 32.5 30.3
Other Developed Asia 0.0 0.6
Other Emerging Asia 0.0 0.0
Other Emerging Markets 0.2 0.9
Currency Bloc Fund Index
Dollar 0.0 0.0
Euro 100.0 100.0
UK Pound 0.0 0.0
Other 0.0 0.0
  • Q1 2020 Performance Review

    12-Month Review

    • The Fund maintained a defensive duration position over the trailing twelve-month period. However, rates declined sharply during March to support European economies during the Coronavirus pandemic. Shorter relative duration contributed to total results.
    • Curve positioning was additive primarily due to exposure in 3-year maturities.
    • Sector allocation was neutral for the period.
    • Security selection contributed to results. German, Spanish and Italian sovereign bonds delivered positive returns.

    3-Month Review

    • Shorter duration detracted short-term rates dramatically declined during the quarter.
    • Curve positioning was positive due to exposure to 3-year maturities.
    • Sector allocation was additive, as a result of exposure to short, non-cyclical and insurance corporate bonds. Short sovereigns were beneficial.
    • Outperformance was largely due to security selection, specifically Spanish and Italian sovereign bonds. In addition, Italian and German bank holdings contributed positive results during the period.

    Current Positioning

    • The Fund continues to hold significant exposure to Italian, French and German bonds. Italy is overweight, mainly because of corporate exposure and due to Italy’s higher relative yield-to-maturity.
    • Duration is positioned shorter than the benchmark. Italian bond contribution to duration is slightly behind the benchmark.
    • The Fund maintains larger exposures in the yield curve in the 1 to 2- and 3-year buckets.
    • Sector and Security selection continues to find value in BBB exposure with a corresponding underweight to higher quality AAA bucket.
  • Fund Fact Sheet

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