Flash Note

The strengths of our Fixed Income unconstrained approach

23.09.2019

What does it mean?

An active and global investment approach, that relies on great flexibility in managing exposures through a non-benchmarked philosophy.

  • FLEXIBLE ALLOCATION

    Pertinent tool kit to manage exposures through wide modified duration brackets & use of credit derivatives

  • GLOBAL INVESTMENT UNIVERSE

    Developed and emerging markets Sovereign and corporate bonds

  • NON-BENCHMARKED APPROACH

    No bias to any curves, regions or economic sectors

What is the benefit?

An unconstrained approach provides our Funds the ability to navigate extremely diverse market environments (see our proof of concept below).

For whom?

For investors looking for bond performance drivers at a time when yields are extremely low and subject to volatility spikes. Our Unconstrained Fixed Income Funds may be suitable for investors seeking higher yields outside Europe, which is undergoing historical financial repression, since it aims to benefit from both rising and declining rates and to seize bottom-up opportunities through our disciplined risk management framework.

Discover our Unconstrained Fixed Income Funds:

  • Carmignac Portfolio Unconstrained Euro Fixed Income

    Investment Universe:
    International bonds Euro hedged

    Main Limits1:
    Modified duration -3 to +8
    HY corporate bonds + EM bonds < 50%
    Structured Credit < 10%

  • Carmignac Portfolio Unconstrained Global Bond

    Investment Universe:
    International bonds

    Main Limits1:
    Modified duration -4 to +10
    Average minimum rating ≥ BBB-
    Structured Credit < 10%

PROOF OF CONCEPT

Flexible allocation

Our Unconstrained Fixed Income Funds navigate different market conditions thanks to a pertinent tool kit. For example, wide modified duration brackets that can go from negative to positive territory are used with the objective of generating positive performance even in a rising rate environment and containing the downside when facing market risks.



[Insights] 2019 09_FN_Exp_FI (Pro) EN_1

Source: Carmignac, 30/08/2019
* Since 01/03/2010

Global Investment Universe

Our Unconstrained Funds deploy a global fixed income strategy which exploits a broad and diversified investment universe to identify opportunities across the globe. Our Fund Managers seek to implement interest rate, credit and, for those authorized to do so, currency strategies (Carmignac Portfolio Unconstrained Global Bond) in both developed and emerging markets.

[Insights] 2019 09_FN_Exp_FI (Pro) EN_2

Source: Carmignac, 30/08/2019

Non-benchmarked approach

Our non-benchmarked investment approach enables us to build high-conviction portfolios that are based exclusively on our top-down views. Having latitude in terms of regions, sectors and asset classes gives us the opportunity to unearth best performance drivers in both bull and bear markets.

Carmignac Portfolio Unconstrained Global Bond

Main risks of the Fund

CREDIT: Credit risk is the risk that the issuer may default.

INTEREST RATE: Interest rate risk results in a decline in the net asset value in the event of changes in interest rates.

CURRENCY: Currency risk is linked to exposure to a currency other than the Fund’s valuation currency, either through direct investment or the use of forward financial instruments.

DISCRETIONARY MANAGEMENT: Anticipations of financial market changes made by the Management Company have a direct effect on the Fund's performance, which depends on the stocks selected.

The Fund presents a risk of loss of capital.

Carmignac Portfolio Unconstrained Euro Fixed Income

Main risks of the Fund

INTEREST RATE: Interest rate risk results in a decline in the net asset value in the event of changes in interest rates.

CREDIT: Credit risk is the risk that the issuer may default.

CURRENCY: Currency risk is linked to exposure to a currency other than the Fund’s valuation currency, either through direct investment or the use of forward financial instruments.

EQUITY: The Fund may be affected by stock price variations, the scale of which is dependent on external factors, stock trading volumes or market capitalization.

The Fund presents a risk of loss of capital.