Flat first half for NB Global Floating Rate Income

NBLS / NBLU : Flat first half for NB Global Floating Rate Income

Both NB Global Floating Rate Income’s US dollar and Sterling net asset values were remarkably stable over the first half of 2014 (difference was fractions of a cent / penny). Adjusting for income, the total return on net asset value was 1.8% for both classes of share. The share prices fell however – the US dollar shares fell from $1.0675 to $0.9962 and the Sterling shares from £1.056 to £0.986. The shift in the share prices represents a move from trading at a 5%+ premium to a c1.5% discount. The company’s C shares merged into the ordinary shares during the period. The annualised yields on the two share classes at the end of June were both 3.68%.

NB Global Floating Rate Income is managed by Joseph Lynch and Stephen Casey in New York and Martin Rotherham in London, the managers say that default rates rose in both the US and Europe – largely down to defaults by three big borrowers – Energy Futures (TXU) in the US and Vivarte (a French retailer) and Autobar (UK vending machines) in Europe. The NB Global Floating Rate Income portfolio did not have exposure to any of these companies.

At the end of June the portfolio was split roughly 90 : 10 US : Europe in 233 holdings across 161 issuers. Currency hedging accounts for the matching performance of the dollar and Sterling share classes at a time when Sterling strengthened considerably against the US dollar.

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