DJE - Short Term Bond PA (EUR)

DJE - Short Term Bond PA (EUR) Header Image
ISIN:
LU0159549814
As at:
27/01/2020
Bid:
116.00 EUR
Offer:
117.16 EUR

Monthly Commentary

The international bond markets were under pressure in December. Yields on high-quality 10-year government bonds rose from -0.36% to -0.19% in Germany and from 1.81% to 1.92% in the USA. The main reason for this was the growing risk appetite of market participants in view of the agreement between the USA and China on a "phase one" trade agreement. This essentially means that the USA will waive various announced import duties and that China will import more agricultural goods from the USA. In Europe, the election victory of the British Conservatives initially provided clarity that Britain will certainly leave the EU. However, after the election victory, Prime Minister Boris Johnson announced that the trade agreement between the EU and the UK would have to be agreed as early as the end of 2020, which again raised fears of a hard Brexit among some market participants. In this market environment, government bonds with shorter maturities showed different trends. The yield on 2-year German Bunds rose by 4 basis points to -0.60%, while the yield on their Italian counterparts fell by 8 basis points to -0.06%. The corresponding yield in the USA also narrowed by 4 basis points to 1.57%. In Europe, the yield on high quality corporate bonds remained unchanged at 0.51%. In contrast, yields on high-yield European bonds narrowed by 21 basis points to 3.19% at the end of the month. On the other side of the Atlantic, high quality corporate bonds also showed a more positive trend, with yields falling by 3 basis points to 2.84%. High-yield US bonds declined by 40 basis points to 5.19%. Against this background, the value of the DJE - Short Term Bond rose by 0.13%. In December, the fund performance benefited above all from the decline in risk premiums on high-yield corporate bonds (including subordinated bonds) and the narrowing of spreads on some government bonds (e.g. Italy, USA). On the other hand, the widening of spreads on various European government bonds (e.g. Germany) adversely affected the Fund's performance. In addition, the fund also suffered from rising interest rates. In the course of the month, the fund management purchased a smaller contingent of subordinated corporate bonds. The fund's bond allocation remained almost stable at 79.61% (79.92% in the previous month). The average residual maturity was reduced to 0.17% (1.99% in the previous month) by increasing the hedging of US and Italian government bonds. At the end of the month, US dollar-denominated bonds were fully hedged.

Legal Information / Disclaimer:

Figures subject to revision by the auditors on the reporting dates. The published information does not constitute investment advice or a recommendation, but only provides a brief summary of the key features of the fund. The current sales documents (Key Investor Information Document, prospectus, annual report and – if the annual report is older than eight months – the semi-annual report) for the respective investment funds form the sole basis for the purchase of securities. The sales documents are available at no charge at the respective fund company, the distribution company or at www.dje.de. All data and estimates are indicative and may change at any time. This information is based on our assessment of current legal and tax regulations. The data were carefully compiled, but no guarantee can be given for the accuracy of such information. All data are subject to change. The performance is calculated using the BVI (Bundesverband Investment und Asset Management e.V.) method, i.e. without taking into account the subscription fee. Individual expenses such as fees, commissions and other charges are not taken into account in the data and would have a detrimental effect on the performance if they were. The subscription fees payable reduce the invested capital as well as the performance depicted. Data on past performance are not a reliable indicator of future performance. The tax treatment depends on the individual circumstances of the investor and may be subject to change. Please see the prospectus for more detailed tax information. In connection with brokering fund units, the Dr. Jens Ehrhardt Group and its distribution partners may receive reimbursements from costs charged to the funds by the investment companies in accordance with the respective prospectuses. The units of this fund that are issued may only be sold or offered for sale in jurisdictions in which such offer or sale is permitted. Therefore the units of this fund may not be offered for sale or sold in the USA, or offered for sale or sold to or for the account of US citizens or US persons resident in the USA. This document and the information it contains may not be distributed in the USA. The distribution and publication of this document and the offer or sale of units may also be subject to restrictions in other jurisdictions.

*) © 2016 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.