Bank credit managers: the biggest, the best and the other three

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BEST PERFORMERS VS MOST ASSETS
JOHN BLANEY AND ANDREW LIGIO
VICTORY RATE
ERIC MOLLENHOWER
FIDELITY COUNSELOR WITH SWIMMING RATE HIGH INCOME
FIDELITY SERIES FLOATING RATE HIGH INCOME
1/73 3-year risk adjusted rating 6/73
0.71 / td> Manager coefficient 0.00
$ 1.67 billion Assets under management $ 8.74 billion
16.7% Total income for 3 years 13.7%
5.27% Annual return for 3 years 4.36%
1.99% Market share 10.4%

Top performers

John Blaney as well as Andrew Ligio
Floating win rate

Investors are worried about inflation. Please refer only to the “Loans from Morningstar Bank” category to prove this fact.

The peer group manages assets worth $ 80 billion, of which 21% ($ 16.6 billion) were in April alone.

Bank loans or floating rate funds hold the senior debt of lower than investment grade firms, which has a floating function, usually tied to the Libor rate. In an environment of rising interest rates, which are usually accompanied by increases that can help lower-rated companies, loans can be an attractive alternative to other lending securities with fixed coupons and interest rate risk.

The bank credit manager with the best risk-adjusted return in the three years to May (0.71) is John Blaney of 1.7 billion dollars Victory Floating Rate Fund… He has been managing the fund since the beginning of 2013 and has been joined by Andrew Ligio (pictured) in March this year.

Over the three-year period through May, the fund delivered 5.27% annualized return, two full percentage points higher than the category average for active funds during that time.

However, their approach is characterized by increased instability. The three-year standard deviation of the fund’s return was 9.87%, compared with 8.38% for the average active fund in this category.

This volatility makes some sense because, according to Morningstar, the fund has an additional chunk of under-B-rated bonds – almost 15%, up from 8% for its average peer.

Most assets

Eric Mollenhauer
Fidelity floating rate advisor, high yield
Fidelity Series Floating Rate High Yield

The manager with the largest number of assets in the “Bank loan” category is Eric Mollenhauer, which oversees about $ 9 billion, of which $ 8.5 billion is in the floating rate Fidelity Advisor high-income fund.

The fund is one of the oldest in the group of peers, has existed since 2002. He owns just over 10% of the assets of the entire category, and Mollenhauer has been managing it since 2012. Kevin Nielsen joined him at the end of 2018.

Mollenhauer’s three-year annualized return of 4.22%, based on the combination of stock classes he manages in a peer group, outpaces his 3.27% category average but well below the 5.27% published by Victory Floating Rate.

Fidelity Advisor’s high yield floating rate is similar to its competitors in terms of credit quality, but has more securities with a 2-4% coupon range and a 4-6% coupon range than the category average.

However, it is also more susceptible to 0% loans or loans in kind than its average counterpart. These bonds do not pay cash interest, but instead provide lenders with additional securities as payment.

Its second and smaller fund, the Fidelity Series Floating Rate High Income, has a slightly higher standard deviation of three-year return (8.48%) than the category average (8.20%).

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