Winners rationale

Supported by stable growth, slower monetary tightening, benign political outcomes and a surprise currency appreciation against the dollar, European bonds have garnered attraction from private banks in Asia. This attraction is a direct result of the need to diversify fixed income allocations away from exposures that are more likely to take damage from correlation as the US tightens monetary conditions.

Despite the region’s lack of familiarity with European fixed income and the market’s relatively lower yields – two distinct headwinds for greater inflows by Asian HNWIs – demand for more diversified fixed income exposure, across not only geographies but also debt types, led to greater demand for European fixed income funds at private banks in 2017.

Although the broader market registered modest gains (the Bloomberg Barclays Euro Aggregate Bond Index EUR Unhedged returned 2.4% in 2017), the region continued to generate pockets of opportunities, be it from attractive spreads in subordinated debt or providing greater downside protection through senior secured debt.

AllianceBernstein once again has distinguished itself as one of the most dominant managers of the asset class, with a barbell approach between high quality credit in Europe, such as core euro sovereign debt, and riskier credits, ranging from high yield corporate bonds to Europe’s periphery govies.

Backed by a five-strong regional sales team and a consistently client-centric approach to its delivery of product, content and communication, Asia’s private banking fund selectors consequently selected AllianceBernstein, for the second time in three years, as Best Fund Provider – Europe Bond.