The December issue of our Bond Fund Intelligence, which was sent out to subscribers Friday morning, features the lead story, "Bond Fund Market Share: Vanguard Dominates Ranks," which looks at the largest bond fund managers, and our profile, "Invesco's Matt Brill: All Roads Lead to Bonds," which interviews the PM of Invesco Core Plus Bond Fund. BFI also recaps the latest Bond Fund News and includes our Crane BFI Indexes, which show bond fund yields flat and returns up slightly in November. We excerpt from the new issue below. (Contact us if you'd like to see our Bond Fund Intelligence and BFI XLS spreadsheet, or our Bond Fund Portfolio Holdings data.)
Our "Market Share" article says, "Below, we review our latest Bond Fund Family Market Share rankings, which are included each month in our BFI XLS spreadsheet. Like we've seen all year, assets increased in November, led by massive gains from the market leader, Vanguard. Bond fund assets increased by $28.1 billion, or 0.8%, last month to $3.513 trillion. (Crane Data continues to grow its collections, and we're now at about 76.1% of ICI's monthly totals.) Vanguard, which broke over $1.0 trillion in bond fund assets a year ago, broke above the $1.2 trillion level."
It continues, "Bond fund assets have climbed by $80.6 billion, or 2.3%, over the past 3 months, and they've increased by $526.2 billion, or 17.6%, over the past 12 months through Nov. 30, 2019. The biggest increases among the 25 largest managers last month were seen by Vanguard, BlackRock, Invesco, PIMCO and Fidelity, which increased assets by $11.6 billion, $2.6B, $1.6B, $1.5B and $1.4B, respectively. Declines in assets among the largest complexes in November were seen by SSGA, DFA, Guggenheim and Loomis Sayles, which decreased by $1.0B, $565M, $170M and $146M."
Our "Invesco Profile" reads, "This month, BFI speaks with Matt Brill, Head of US Investment Grade Credit at Invesco and a Portfolio Manager on Invesco Core Plus Bond Fund and Invesco Corporate Bond Fund. Invesco has had a series of acquisitions recently which have expanded their fixed income lineup, including taking over Guggenheim's ETFs and OppenheimerFunds. Brill tells us about Invesco's history and lineup in the bond fund space, their strategies for 2020, and a number of other major issues confronting bond fund managers. Our Q&A follows."
BFI says, "Give us some history." Brill answers, "Invesco Fixed Income (IFI) manages about $370 billion across multiple asset classes. We are headquartered in Atlanta, and [our group] has offices in Atlanta, London and Hong Kong. The Global Investment Grade Group manages about $50 billion across retail and institutional strategies."
He continues, "I started in the industry in 2002 doing commercial mortgage backed securities then eventually investment grade corporates [at ING]. In 2013, Michael Hyman and I were both brought over by Greg McGreevy, [who was] looking to build out the investment grade debt and the overall [core] fixed income platform at Invesco.... Since then, our team has raised roughly $30 billion dollars of investment grade assets, and our track record is very strong."
Our Bond Fund News includes the brief, "Yields Flat, Returns Up in November," which tells us, "Bond fund yields were flat to lower and returns were up slightly last month. Our BFI Total Index returned 0.10% over 1-month and 7.47% over 12 months. The BFI 100 returned 0.05% in Nov. and 8.35% over 1 year. Our BFI Conservative Ultra-Short Index returned 0.13% over 1-mo and 2.81% over 1-yr; Ultra-Shorts averaged 0.16% in Nov. and 3.09% over 12 mos. Short-Term returned 0.07% and 5.07%, and Intm-Term lost 0.03% last month but rose 9.36% over 1-year. BFI's Long-Term Index returned 0.09% in Nov. and 13.00% for 1-yr; our High Yield Index rose 0.41% in Nov. and 7.95% for 1-year."
In another News brief, we quote the Investment News piece, "Flows into bond ETFs surpass those into equity ETFs for first time since 2009." They explain, "Whether it's in response to the nonstop efforts to impeach President Trump, the record-level stock market valuations or any of several geopolitical concerns, a growing risk-off mood among investors is sending money flooding into fixed-income funds. Through mid-November, bond ETFs have already seen nearly $130 billion worth of net inflows, which surpasses the full-year record of $125 billion set two years ago."
A third News update covers the Barron's article, "The 60/40 Stock/Bond Portfolio." It says, "A shorter-duration fixed-income portfolio would carry less risk from an uptick in yields. And that's what BCA Research is advising clients to hold, based on what it dubs 'the Golden Rule of Bond Investment.' ... Going shorter also was the advice offered by John Coumarianos last month in Barron's."
Finally, BFI features a sidebar entitled "Ultra-Shorts Show Gains." It says: "A brief entitled, 'Ultra-short Obligation Funds Wrap Up Third Consecutive Year of Impressive Net Inflows,' tells us, 'Lipper's Ultra-Short Obligation Funds (USO) peer group (including both mutual funds and ETFs) had net positive flows of $977 million for the fund-flows trading week ended Wednesday, December 4. This was the group's ninth-straight weekly net inflow. The USO group's hot streak extends well beyond the fourth quarter of 2019, as since the end of 2017 they've taken in net new money in 94 out of 101 weeks for a total net intake of $72.1 billion.'"
