CF Canlife Global Bond Fund Update

us & Europe outperform



July was a strong month for the CF Canlife Global Bond Fund, as our relative performance was driven predominantly by our exposure to US and European credit. Although bunds were flat, it was Italy and Spain that were the biggest winners in the European government bond space, as continued positive economic news provided a supportive investment environment. The corporate space continued to outperform also, with financials the top performing sector yet again. This was driven by further spread compression, which has been one of the most significant trends of 2017 so far. In addition, the return of our Euro-denominated assets was further boosted by the Euro’s 2% appreciation versus Sterling.

US economic indicators also mostly surprised on the upside, as the Institute of Supply Management (ISM) Purchasing Managers’ Index (PMI) came in at 57.8, versus a consensus expectation of 55.5. US payroll data was also better than expected. This backdrop saw corporates – and financials in particular – outperform treasuries, which benefited our positioning. However, US dollar weakness did hurt some relative performance somewhat, with the trade-weighted dollar coming off 2.9% in July. Looking forward, the story remains the success (or not) of President Trump’s legislative agenda, which we are watching closely, whilst the pick-up in inflation is also key as it will influence the US Federal Reserve’s next policy decisions

Elsewhere, Japanese government bonds were largely unchanged, whilst the performance of the yen was also mixed. The primary credit selection event of the month revolved around AstraZeneca and the failure of its ‘Mystic’ drugs trial. We do not hold any AstraZeneca as it fails to meet the criteria for our credit selection process. Although it is a high quality name, it trades extremely tight. Therefore, as investors, we do not receive adequate compensation for the potential downside risk.


Past performance is not a guide to future performance. The value of investments may fall as well as rise and investors may not get back the amount invested. Income from investments may fluctuate. Currency fluctuations can also affect performance.

The information contained in this document is provided for use by institutional investors, professional investors and professional advisers and is not for onward distribution to, or to be relied upon by, private investors. No guarantee, warranty or representation (express or implied) is given as to the document’s accuracy or completeness. The views expressed in this document are those of the fund manager at the time of publication and are subject to change at any time without notice. This document is issued for information only by Canada Life Investments. This document does not constitute a direct offer to anyone, or a solicitation by anyone, to subscribe for shares or buy units in fund(s). Subscription for shares and buying units in the fund(s) must only be made on the basis of the latest Prospectus and the Key Investor Information Document (KIID) available at

Canada Life Investments is the brand for investment management activities undertaken by Canada Life Asset Management Limited, Canada Life Limited and Canada Life European Real Estate Limited. Canada Life Asset Management Limited (no. 03846821), Canada Life Limited (no.00973271) and Canada Life European Real Estate Limited (no. 03846823) are all registered in England and the registered office for all three entities is Canada Life Place, Potters Bar, Hertfordshire EN6 5BA. Canada Life Asset Management is authorised and regulated by the Financial Conduct Authority. Canada Life Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.

CLI00880 Expiry on 15 November 2017

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