New Capital Wealthy Nations Bond Fund

Marketing Communication

Executive Summary

Key events in market

May was a strong month for both equities and fixed income markets. Investor sentiment remains highly sensitive to interest rate expectations, with markets still anticipating cuts this year, albeit with some divergence in timing between the Federal Reserve and the European Central Bank. Indicators of activity have surprised with Europe showing improvement in economic growth whilst Japan and the US generally have slowed down, but labour markets remains tight.

Key performance & positioning updates

The Fund showed a strong absolute and relative return, outperforming its benchmark by over 40bp (ICE BofAML Eurodollar Index). The portfolio benefited from positive contributions from all sources of return with most bonds showing positive returns. Emerging markets generally outperformed. The Fund continues to show that credit and country selections is essential in a market of tight spreads.

Market Update

After a pause in April, the stock market rally resumed in May. The MSCI World All Countries Index rose 4.1% for the month, bringing its year-to-date gain to 9.1%. The performance of global equity markets is significant because it occurred while market participants further reduced expectations of interest rate cuts by major central banks. In fact, government bond yields remained close to 2024 highs. The upward trend in yields was more evident in Europe than in the US and this contributed to the recovery of European currencies against the US dollar, whose trade weighted index lost about 1.5% in the month.

The favourable surprises on corporate earnings published in recent weeks have given impetus to stock markets. Once again, the technology giants led the pack, but reported earnings exceeded expectations by a wide margin in other sectors and constituencies as well, including the financial sector and Europe. Furthermore, the guidance given by companies supports the expectation that the earnings trend should remain robust in the second half of the year.

The upward revision to expected GDP growth at a global level also supports this view. The improved outlook reflects not only the better-than-expected data for the first quarter of the year but also encouraging signs emerging from the most recent economic surveys, particularly in the manufacturing sector. It is not surprising that this translates into improved growth prospects especially in Europe and Asia since here the industrial sectors have a greater relative weight than in the US.

Fund Performance & Positioning

The Fund showed a strong return on an absolute and relative basis during May, outperforming its benchmark (ICE BofAML Eurodollar Index) by over 40bp mainly due to region and security selection. The Fund also closely followed the JPM EMBI Investment Grade Index, not only during May, but for what we have seen of this year. All sources of return were positive during the month, with the main contribution coming from interest rates and carry.

Although inflation has been stubborn, economic activity has started to show signs of weakness, especially when much of the recent growth has been directly linked to higher government spending. Investors are giving the US the benefit of the doubt given it is an election year, but these deficit numbers are starting to get scary. Interest rates reacted to the data with a tightening in US Treasuries of 18bp in the 10yr part of the curve, with a small steepening of the curve. Perhaps the most surprising aspect of the month is how spreads continue to tighten after 14 months of a trend that does not seem to stop. Spreads at the benchmark level ended 2bp tighter than last month, nearly at the lowest level of the past 15 years. Emerging markets moved similarly, however showing signs of widening in the last few days of the month. Within the Fund, high quality long duration bonds like PIF 2053, Qatar 2048 and Chile 2042 – all in our top 10 positions- were amongst the best performers. The Fund’s exposure to developed market financials also performed well, although there has been some trimming activity in the sector as valuations become fair.

We have been consistent in our positioning this year with a preference for credit risk in the short part of the curve, combined with interest rate duration. This barbell strategy gives, we believe, the best of both credit and duration risk in an environment of tight spreads, AN inverted curve, and overall attractive yields. By keeping the BBB exposure in the shorter duration bucket, carry most likely will offset any move in spreads, when/if they widen, whilst the longer duration in A to AAA names should serve as a hedge against negative surprises and outperform if either growth deteriorates or political volatility increases. The Fund also continues to show a preference for quasi sovereigns over government bonds in emerging markets, with the most recent trade being replacement of Chile mid duration for Chile electricity 2033.

New Capital Wealthy Nations Bond Fund ICE BofAML Eurodollar Index Difference
1 Month +2.15% +1.73% +0.42%
3 Month +0.85% +0.54% +0.31%
6 Month +4.63% +2.96% +1.67%
YTD -0.25% -0.77% +0.52%
1Yr +4.29% +4.05% +0.24%
3Yr Annualized -5.07% -2.35% -2.72%
5Yr Annualized -0.57% +0.96% -1.53%
Since inception annualized +3.68% +3.16% +0.52%
Since inception 18.09.2009 +70.17% +57.98% +12.19%

Past performance is not necessarily a guide to the future. The value of your investments and the income from them may fall as well as rise as a result of market as well as currency fluctuations and you may not get back the full amount invested. Fund performance is net of fees and representative of the USD I Inc Share Class and shows a maximum of five previous calendar years and current year to date (computed on a NAV to NAV basis). Where share class inception begins prior to the five previous years the chart has been rebased to 100. Where the Fund has fewer than five full years of performance, returns are shown from the inception date. Source: EFG Asset Management, Bloomberg.  As at 31 May 2024.


By just looking at spreads and equity performance you would believe we are in a very high growth momentum environment, and economic growth has continuously surprised to the upside in recent years. However, activity indicators are starting to show signs of weakness and while some investors will be quick to find an explanation and ignore it as a one-off, we believe we should be more cautious, particularly at these levels of spreads.

The recessionary risk that most economists expected last year has been postponed or potentially avoided, however with spreads this tight, it is not costly to have a quality bias and protect yourself against a faster than anticipated growth deterioration. Especially when we have seen that most growth has been linked to public sector spending. We have seen a significant decrease in spreads on absolute levels but especially on relative levels, with differentials between high yield and investment grade spreads at the lowest of the past 10 years. As spreads tighten investors might be tempted to chase yield and add credit risk. We believe the opposite to be a better strategy, as with uncertainty, spreads in lower rate buckets might eat up returns faster than in higher quality. The symmetry of returns for investment grade credit looks highly attractive.

Moreover, we believe the Fund’s investment process will be critical in selecting which countries to invest, but maybe even more importantly which countries to avoid. The debt risk is high. For the past 20 years, but especially since Covid, debt has increased significantly and the number of countries showing large negative deficits is at record levels. Rising rates will put pressure on borrowers who have over leveraged in an era of easy liquidity, but if that liquidity dries up either triggered by domestic or external factors, that economy will be in great difficulty to attract capital particularly in a low growth scenario. The “flight to quality” happens fast and we believe it is now perfect timing to start paying attention as the market is still not pricing in a difference between a “wealthy” country and one that is not.

With stubborn inflation, investors are apprehensive about duration, but not all duration is bad. We continue to run an overweight duration relative to the benchmark, but lower to investment grade emerging markets to give a better balance of returns. We strongly believe that rates are more likely than not to be lower in the next 12-24 months and that spreads are more likely than not to be wider in the next 12-24 months. Under that view, investment grade bonds show as an attractive proposition, with an attractive base yield and moderate volatility, should a downside scenario arise. We believe the Fund’s bias towards quality both from a credit rating perspective but also from a country selection perspective are crucial and will likely help outperform other investment grade on a goldilocks scenario, but most importantly on a more severe and less positive one. Relative value ideas and active management become more important when spreads are tight as there is little room for error.



For professional clients, qualified investors and accredited investors only. The value of investments and the income derived from them can fall as well as rise, your capital is at risk. Note: Past performance is not a guide to the future. Returns may increase or decrease as a result of currency fluctuations.

All sources: EFG Asset Management (UK) Limited ("EFGAM"), Factset, Bloomberg, Morningstar as at end of the month.  Any other sources as applicable. 

This document has been produced by EFG Asset Management (UK) Limited for use by the EFG International  ("EFG Group" or "EFG") worldwide subsidiaries and affiliates within the EFG Group. EFG Asset Management (UK) Limited is authorised and regulated by the UK Financial Conduct Authority, registered no. 7389736. Registered address: EFG Asset Management (UK) Limited, Park House, 116 Park Street, London W1K 6AP, United Kingdom, telephone +44 (0)20 7491 9111. 

This document has been prepared solely for information purposes. The information contained herein constitutes a marketing communication and should not be construed as financial research or analysis, an offer, a public offer, an investment advice, a recommendation or solicitation to buy, sell or subscribe to financial instruments and/or to the provision of a financial service. It is not intended to be a final representation of the terms and conditions of any investment, security, other financial instrument or other product or service. The content of this document is intended only for persons who understand and are capable of assuming all risks involved. Further, this document is not intended to provide any financial, legal, accounting or tax advice and should not be relied upon in this regard. The information in this document does not take into account the specific investment objectives, financial situation or particular needs of the recipient. You should seek your own professional advice (including tax advice) suitable to your particular circumstances prior to making any investment or if you are in doubt as to the information in this document. 

Performance results shown are net of applicable fees and expenses. The value of investments and the income derived from them can fall as well as rise, and you may not get back the amount originally invested. Past performance is no indicator of future performance. Investment products may be subject to investment risks, involving but not limited to, currency exchange and market risks, fluctuations in value, liquidity risk and, where applicable, possible loss of principal invested. Some funds may have high volatility owing to portfolio composition or the portfolio management techniques utilised or be subject to various other risk factors. Such risks are set out in the Prospectus and KIID/KID.

A copy of the English version of the prospectus of the Fund and the key investor information document relating to the Fund is available on and may also be obtained from EFG Asset Management (UK) Limited. Where required under national rules, the key investor information document/the key information document will also be available in the local language of the relevant EEA Member State. 

The information provided in this document is not the result of financial research conducted by EFGAM’s research department. Therefore, it does not constitute investment or independent research as defined in EU regulation (such as “MIFID II” or “MIFIR”) nor under the Swiss “Directive on the Independence of Financial Research” issued by the Swiss Banking Association or any other equivalent local rules. Investors should carefully read the Prospectus and the Key Investor Information Document (KIID) and review such documents prior to taking any investment decisions.  This information can be obtained on request and free of charge from your client relationship officer.

Waystone Management Company (IE) Limited is the appointed Management Company and is regulated by the CBI. The Manager is a private limited company incorporated in Ireland under the company registration number C123529 with its registered office at 4th Floor, 35 Shelbourne Road, Ballsbridge, Dublin, D04 A4E0, Ireland.
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Comparisons to indexes or benchmarks in this material are being provided for illustrative purposes only and have limitations because indexes and benchmarks have material characteristics that may differ from the particular investment strategies that are being pursued by EFG and securities in which it invests.

The information and views expressed herein at the time of writing are subject to change at any time without notice and there is no obligation to update or remove outdated information.
Risks associated with debt instruments with loss-absorption features – the Fund/Note/Account may invest in debt instruments with loss-absorption features, for example, contingent convertible debt securities (“CoCos”), senior non-preferred debts and subordinated debts issued by financial institutions. These debt instruments are subject to greater risks when compared to traditional debt instruments as such instruments typically include terms and conditions which may result in them being partly or wholly written off, written down, or converted to ordinary shares of the issuer upon the occurrence of a pre-defined trigger event (e.g. when the issuer is near or at the point of non-viability or when the issuer’s capital ratio falls to a specified level). Such trigger events are likely to be outside of the issuer’s control and are complex and difficult to predict and can result in a significant or total reduction in the value of such instruments.
Country of origin of the collective investment scheme:  Ireland.  The information contained in this document is merely a brief summary of key aspects of the fund.

More complete information on the fund can be found in the relevant memorandum and articles of association, prospectus, key information document, the addenda, the supplements and the most recent audited annual report and the most recent semi-annual report. These documents constitute the sole binding basis for the purchase of fund units. Copies of these documents are available free of charge and may be obtained upon request from and also as follows:

Ireland: from the registered office of the Fund at 35 Shelbourne Road, Ballsbridge, Dublin, Ireland

United Kingdom:  from the UK facilities agent, EFG Asset Management (UK) Limited, Park House, 116 Park Street, London W1K 6AF, United Kingdom

Switzerland: from the Swiss representative, CACEIS (Switzerland) SA, Route de Signy 35, CH-1260 Nyon 2 and the paying agent, EFG Bank SA, 24 Quai du Seujet, CH-1211, Geneva 2, Switzerland.

Italy: from the Italian paying agent, All funds Bank S.A.U., Milan Branch, Via Santa Margherita, 7 – 20121, Milan, Italy

Germany: from the German Facility Agent, FE fundinfo (Luxembourg) S.a.r.l. 6 Boulevard des Lumières, Belvaux 4369 Luxembourg

Austria, France, Luxembourg, the Netherlands, Portugal, Spain and Sweden: from the European Facility Service provider, FE fundinfo with registered address 6 Boulevard des Lumières, Belvaux, 4369 Luxembourg

Cyprus: from the Cypriot Paying Agent Eurobank Cyprus Ltd, 41 Makariou Avenue, 1065, Nicosia, Cyprus

Greece: from the Greek Paying Agent, Eurobank S.A., 8 Othonos Street, 10557 Athens, Greece

A summary of investor rights associated with an investment in the Fund shall be available in English from

Termination of marketing arrangements: Waystone Management Company (IE) Limited have the right to terminate the arrangements made for marketing the Fund in certain jurisdictions and to certain investors. In such circumstances, Shareholders in the affected EEA Member State will be notified of this decision and will be provided with the opportunity to redeem their shareholding in the Fund free of any charges or deductions for at least 30 working days from the date of such notification. 

European Union: Waystone Investment Management (IE) Limited is the European investment distributor and is authorized in Ireland as an investment firm under the Markets in Financial Instruments Directive. Waystone Investment Management (IE) Limited acts as a distributor
in the European Union under reference number C1011 and Ireland. Waystone Investment Management (IE) Limited does not provide investment advice on an independent basis.

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Singapore: This document shall be construed as part of the information memorandum (the "Information Memorandum") for the Fund, which shall be deemed to include and incorporate this document and any other document, correspondence, communication or material sent or provided to eligible participants in relation to the Fund from time to time. Accordingly, this document must not be relied upon or construed on its own without reference to and as part of the Information Memorandum.

The Fund has not been authorised or recognised by the Monetary Authority of Singapore (“MAS”), and the units in the Fund (the "Units") are not allowed to be offered to the retail public. Moreover, the Information Memorandum is not a prospectus as defined in the Securities and Futures Act 2001 of Singapore, as amended or modified from time to time (“SFA”), and statutory liability under the SFA in relation to the content of prospectuses would not apply. The Information Memorandum has not been and will not be registered as a prospectus with the MAS. Accordingly, the Information Memorandum, this document and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the Units may not be circulated or distributed, nor may the Units be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to the public, any member of the public or any person in Singapore, other than under an exemption provided in the SFA for offers made (a) to an institutional investor (as defined in Section 4A of the SFA) pursuant to Section 304 of the SFA, (b) to a relevant person (as defined in Section 305(5) of the SFA), or any person pursuant to an offer referred to in Section 305(2) of the SFA, and in accordance with the conditions specified in Section 305 of the SFA, or (c) otherwise pursuant to, and in accordance with, the conditions of any other applicable provision of the SFA. The Units are classified as "capital markets products other than prescribed capital markets products" (as defined in the Securities and Futures (Capital Markets Products) Regulations 2018 and Specified Investment Products (as defined in MAS Notice SFA 04-N12: Notice on the Sale of Investment Products and MAS Notice FAA-N16: Notice on Recommendations on Investment Products).

Information for investors in Australia: 
For Professional, Institutional and Wholesale Investors Only. This document has been prepared and issued by EFG Asset Management (UK) Limited, a private limited company with registered number 7389736 and with its registered office address at Park House, Park Street, London W1K 6AP (telephone number +44 (0)20 7491 9111). EFG Asset Management (UK) Limited is regulated and authorized by the Financial Conduct Authority No. 536771. EFG Asset Management (UK) Limited is exempt from the requirement to hold an Australian financial services licence in respect of the financial services it provides to wholesale clients in Australia and is authorised and regulated by the Financial Conduct Authority of the United Kingdom (FCA Registration No. 536771) under the laws of the United Kingdom which differ from Australian laws.  This document is personnal and intended solely for the use of the person to whom it is given or sent and may not be reproduced, in whole or in part, to any other person.
 ASIC Class Order CO 03/1099 EFG Asset Management (UK) Limited notifies you that it is relying on the Australian Securities & Investments Commission (ASIC) Class Order CO 03/1099 (Class Order) exemption (as extended in operation by ASIC Corporations (Repeal and Transitional Instrument 2016/396) for UK Financial Conduct Authority (FCA) regulated firms which exempts it from the requirement to hold an Australian financial services licence (AFSL) under the Corporations Act 2001 (Cth) (Corporations Act) in respect of the financial services we provide to you. 

UK Regulatory Requirements 
The financial services that we provide to you are regulated by the FCA under the laws and regulatory requirements of the United Kingdom which are different to Australia. Consequently any offer or other documentation that you receive from us in the course of us providing financial services to you will be prepared in accordance with those laws and regulatory requirements. The UK regulatory requirements refer to legislation, rules enacted pursuant to the legislation and any other relevant policies or documents issued by the FCA.  Your Status as a Wholesale Client. In order that we may provide financial services to you, and for us to comply with the Class Order, you must be a 'wholesale client' within the meaning given by section 761G of the Corporations Act. Accordingly, by accepting any documentation from us prior to the commencement of or in the course of us providing financial services to you, you warrant to us that you are a ‘wholesale client’; agree to provide such information or evidence that we may request from time to time to confirm your status as a wholesale client; agree that we may cease providing financial services to you if you are no longer a wholesale client or do not provide us with information or evidence satisfactory to us to confirm your status as a wholesale client; 
and agree to notify us in writing within 5 business days if you cease to be a 'wholesale client' for the purposes of the financial services that we provide to you.


Offering Documents 

Neither this document nor any document under which Interests in the New Capital UCITS Fund plc (the “Fund”) are offered is a prospectus, product disclosure statement or other formal disclosure document under the Corporations Act.  Interests in the Fund may not be offered, issued, sold or distributed in Australia other than by way of or pursuant to an offer or invitation that does not need disclosure to investors either under Part 7.9 or Part 6D.2 of the Corporations Act, whether by reason of the investor being a wholesale client (as defined in section 761G of the Corporations Act and applicable regulations) or otherwise. Nothing in this document nor any document under which interests in the Fund are offered constitutes an offer of interests in a financial product or financial product advice to a 'retail client' (as defined in section 761G of the Corporations Act and applicable regulations).

The issuer of the interests in the Fund relies on exemptions available under Australian law from the need to hold an AFSL for the provision of financial services to Australian wholesale clients. Note that as all investors must be wholesale clients, no cooling off rights are available in relation to an investment in the Fund.

Contact us:
Park House
116 Park Street

+44 (0)20 7491 9111
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