This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Strategic Global Income Fund, Inc. – Fund Commentary

As discussed, the emerging markets asset class generated strong results during the fourth quarter. While US dollar-denominated emerging markets debt, as measured by the JP Morgan Emerging Markets Bond Index Global (EMBI Global), posted a 3.33% return over the period, local currency emerging markets debt, as measured by the J.P. Morgan Government Bond Index-Emerging Markets Global Diversified (GBI-EM Global Diversified), posted an even stronger return of 4.13%.. The high yield bond market, as measured by the Bank of America Merrill Lynch US Cash Pay High Yield Constrained Index, returned 3.15% during the fourth quarter. High yield bond prices were supported by generally robust demand, solid corporate fundamentals and continued low defaults. From a ratings perspective, better-quality rating categories broadly underperformed lower-quality bonds, with the BB and B-rated segments lagging the CCC and below-rated segment.

Performance Review

During the fourth quarter of 2012, the Fund posted a net asset value total return of 2.42% and a market price total return of 0.39%. On a net asset value basis, the Fund outperformed its benchmark, the Strategic Global Benchmark (the “Index”), 1 which declined 0.06% for the quarter.

The Fund's spread sector exposures drove its outperformance during the fourth quarter. 2 In particular, the Fund's overweight allocation to corporate credit (both investment grade and high yield bonds) was the largest contributor to results. Overweights to CMBS and mortgage-backed securities (MBS) were also additive for results, albeit to lesser extents. Security selection, too, was positive for performance during the quarter. Within investment grade credit, the Fund's holdings in the financial subsector were the most beneficial to performance. We also experienced positive security selection in CMBS, MBS and emerging markets debt.

Overall, duration positioning contributed to results, when the Fund was rewarded for having a shorter duration than its benchmark as US rates moved higher during the quarter. Elsewhere, the Fund’s currency positioning added to results. In particular, having a short to the Japanese yen was beneficial, as newly elected Prime Minister Shinzo Abe vowed to take "truly meaningful measures" to weaken the yen in order to help boost Japan’s faltering economy. In addition, the Fund's overweight to local currency emerging markets debt was a positive contributor.

2 of 4

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,912.11 -70.48 -0.42%
S&P 500 1,969.95 -8.96 -0.45%
NASDAQ 4,442.6980 -2.2110 -0.05%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs