The fund increased by 2.1% over the quarter, versus the Barclays EUR Aggregate Corporate Total Return Index, which increased by 0.3%
Performance of the fund for the period
There are two important sources of return for the fund. The first, which is significant and always positive, is the income from the underlying bonds. The yield to maturity of the fund is 3.1%. We received 0.8% in accrued income during the period. The second component of return for the fund is realised / unrealised capital gains or losses. In general, as the fund follows a fundamental buy and hold strategy, this component is largely the result of prices being marked up or down. During the period, this had a positive contribution.
The aggregate positive contribution of the top 10 contributors was approximately 1.0%. The top performer was the Rabobank 6.5% securities which have been lagging prior to this quarter and we expect them to continue performing strongly in the coming quarter. Apart from that, a combination of different types of securities, such as AT1 contingent convertibles (CoCos) and legacy securities were the other top performers. We believe that there is more significant upside among these securities as spreads remain wider than pre-Covid levels.
The aggregate negative contribution of the bottom 10 detractors was less than 1 bps. We have seen small pockets of underperformance during the quarter, notably within corporate hybrids.