New Capital Wealthy Nations Bond Fund

Stratton Street has been the sub-advisor on the New Capital Wealthy Nations Bond Fund since it was launched in 2009.

The New Capital Wealthy Nations Bond Fund is a fund that invests in bonds based on fundamental credit. Countries are screened by their ability to repay debt, using Stratton Street’s net foreign assets (NFA) model, and then credits are evaluated based on value for money and fundamentals of the credit. We see this as a return to fundamentals of credit analysis for fixed income, rather than the indexed approach used by most other funds.

Investing in fixed income based on index weights simply means having to buy more of a country or company’s debt as it becomes more indebted. The fund first screens out the countries that are dangerously indebted, so the fund has have never invested in Greece, Spain, Portugal or Ireland for example. Instead the fund has invested in the wealthy countries that in net terms are creditors internationally, not debtors. These countries include Germany, China, Norway, the Netherlands, Abu Dhabi and Korea.

The Fund is a UCITS fund listed on the Irish Stock Exchange. An Australian Trust, the Stratton Street New Capital Wealthy Nations Bond Fund is also available.