Amundi funds bond global aggregate citywire 6 dec 2012
Amundi Funds Bond Global Aggregate Tapping value wherever it exists Citywire December 2012This material is solely for the attention of "professional” investors(see more details and definitions at the end of the document).
Long-term, successful, macro-management in a global aggregate universe A broad universe Government bonds, investment grade credit, emerging bonds, high yield, ABS and currencies Flexible style adapted to Combining long-term macro-views with short-term tactical “full cycle” management management Dynamic asset allocation to tap value wherever it exists $509 mn AuM with a focus to invest in liquid assets Stability of team and 7-year track record1 for the flexible bond process resources (Aggregate) and managed by Hervé Hanoune since 2008 Supported by all the London global fixed income teams and the infrastructure of Amundi Group worldwide Solid track record 12.2% annualised net performance since inception versus 5.4% for the reference indicator1Source: Amundi, September 2012. Information given for indicative purposes only, may change without prior notice. Past Amundi Funds Bond Global Aggregate - Citywire - November 2012 - page 2performance is not necessarily a guide to future performance. Investors may not get back the amount they originally investThe sub-fund does not offer any capital or performance guarantee.Please refer to Amundi Funds prospectus for further details about the assets authorised in the sub-fund and regarding theinvestment and management style of the sub-fund1 Inception date of Amundi Funds Bond Global Aggregate 30 October 2007, details of performance page 10
Amundi is a leading fixed income manager $918.9 Bn AUM1 Global Fixed Income (GFI) Platform AuM $545 billion Global Sovereign Global Corporate 17 London- 18 Strategy & Global Aggregate based team Credit Economic Analysts Research Emerging Market Debt Global Currency 10 Emerging 17 Equity Quantitative PM and Research analystsIllustration given for indicative purposes only. May change without prior notice.1.Amundi Group figures as at September 2012. Amundi Funds Bond Global Aggregate - Citywire - November 2012 - page 3
Opportunities are abundant but change over investment cycles… 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 YTD MTD 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 YTD MTDEM external EM external US US EM external US Credit EM (MSCI) EM (MSCI) EM (MSCI) EM (MSCI) EM (MSCI) EM (MSCI) EM (MSCI) EuroStoxx debt debt Treasury Treasury debt 10.40% 51.59% 22.45% 30.31% 29.18% 36.48% 74.50% 16.36% 4.89% 14.41% 13.12% 13.74% 9.81% 16.61% US US US Asia Pacific DM exp. US DM exp. US Asia Pacific Euro Global High Global High Spread = 16.3% Global High DM exp. US EuroStoxx EM external Treasury Treasury Treasury (MSCI) (MSCI) (MSCI) (MSCI) Treasury Yield Yield Yield (MSCI) 21.28% debt 8.46% 13.52% 6.75% 11.79% 38.07% 17.59% 23.47% 12.28% 8.37% 57.69% 15.07% 16.34% 2.36% Euro DM exp. US Asia Pacific Asia Pacific US Asia Pacific Asia Pacific EU Credit US Credit EuroStoxx EU Credit US Credit S&P 500 EM external Treasury (MSCI) (MSCI) (MSCI) Treasury (MSCI) (MSCI) 6.47% 10.52% 15.12% -2.56% 8.35% 15.88% debt 1.65% 9.49% 35.28% 16.30% 21.04% 9.01% 34.46% 14.32% Euro Global High Global High DM exp. US Asia Pacific DM exp. US EM external US Credit EU Credit US Credit S&P 500 Global High EuroStoxx Global High Treasury Yield Yield (MSCI) (MSCI) (MSCI) debt 9.39% 8.75% -3.08% 12.78% Yield 3.63% 11.12% Yield 1.63% 5.54% 29.33% 11.99% 10.86% 14.51% 8.62% 28.18% Euro EM external EM external EM external DM exp. US EM external Euro EU Credit Global High S&P 500 S&P 500 EuroStoxx EU Credit S&P 500 Treasury debt debt debt (MSCI) debt Treasury 6.35% Yield 2.44% 26.38% 13.62% 6.79% 10.52% 1.16% 8.23% 11.73% 10.73% -10.91% 27.75% 12.04% 2.63% EM external Euro Global High Global High EuroGlobal High EM external Global High S&P 500 EM external S&P 500 US Credit EU Credit EM (MSCI) debt Treasury Yield Yield TreasuryYield 1.28% debt 1.36% Yield 2.41% 8.99% debt 6.28% 23.45% 8.47% 2.17% 9.92% 25.66% 6.48% 12.20% -25.24% 0.70% US DM exp. US EuroStoxx EM (MSCI) EM (MSCI) EuroStoxx EU Credit Global High EM external US Credit S&P 500 EuroStoxx S&P 500 US Credit Treasury (MSCI) -2.69% -4.91% -7.97% 15.68% 7.47% Yield 5.65% debt 9.88% 5.11% -38.49% 21.14% 0.00% 0.66% 5.87% 9.48% Asia Pacific Euro Asia Pacific DM exp. US DM exp. USSpread = 9.1% Pacific Asia S&P 500 S&P 500 US Credit EU Credit US Credit S&P 500 US Credit US Credit (MSCI) Treasury (MSCI) (MSCI) (MSCI) - (MSCI) -10.14% -13.04% 7.70% 4.09% 4.26% 3.53% 16.04% 8.97% -9.79% 6.94% -43.23% 4.90% 14.82% 0.59%DM exp. US DM exp. US US Euro Euro EuroStoxx EU Credit EuroStoxx S&P 500 EuroStoxx EU Credit EU Credit EuroStoxx EU Credit (MSCI) (MSCI) Treasury Treasury Treasury -20.25% 6.34% 6.90% 3.00% -44.37% 14.41% 4.79% -17.05% 0.53% -15.21% -17.52% 3.08% 3.07% 8.67%Asia Pacific Asia Pacific Euro US Euro DM exp. US Euro Euro Asia Pacific Asia Pacific S&P 500 US Credit Global High EM (MSCI) (MSCI) (MSCI) Treasury Treasury Treasury (MSCI) Treasury Treasury (MSCI) - (MSCI) -23.37% 5.24% Yield 1.95% 0.46% -29.20% -21.84% 3.13% 2.79% 1.84% -45.09% 4.16% 1.02% 17.31% 8.19% DM exp. US US US US US USEM (MSCI) EuroStoxx US Credit EU Credit EU Credit EM (MSCI) EuroStoxx EM (MSCI) (MSCI) Treasury Treasury Treasury Treasury Treasury -31.80% -37.30% 1.96% 0.47% 0.34% -54.48% -5.81% -20.41% -22.61% 2.24% 3.54% -3.57% 1.42% -0.65%Sources: Bloomberg, Amundi. Data as of 23rd October 2012. Amundi Funds Bond Global Aggregate - Citywire - November 2012 - page 4Information given for indicative purposes only.Past market data are no reliable indicators for current or future data.
A challenging environment for government bonds In the prevailing low rate environment, a global fixed income manager can add value through active duration management and asset class diversification.Information given for indicative purposes only. Amundi Funds Bond Global Aggregate - Citywire - November 2012 - page 5Past market data are no reliable indicators for current or future data.
Portfolio construction is as important as market views Active management is not only a function of views. The “risk paradigm” has important implications for portfolio construction. The “risk on / risk off” behaviour prevailing on financial markets today is an important consideration when deciding on the amount of risk to deployed. Figure 1 Biplot: Factor analysis of mixed‘macro’ asset factors, Factor analysis of mixed ‘macro’ asset factors 2011 sampleFactor analysis of mixed ‘macro’ asset factors, 2005 sample CREDIT ‘Safe-haven’ Assets EQUITIES CURRENCIES ‘Risky’ Assets TREASURIES Source: Amundi as at end 2011. Factor analysis of mixed ‘macro’ asset factors, 2011 sample. Amundi Funds Bond Global Aggregate - Citywire - November 2012 - page 6 Information given for indicative purposes only. Please refer to Prospectus of Amundi Funds and the key investor information documents pertaining to Bond Global Aggregate sub-fund for more information on risks involved
A very broad fixed income investment universe One of the most global benchmark Amundi Funds Bond Global Aggregate universe: Barclays Global Aggregate Use one of the broadest benchmark • Global Investment Grade available • 78% sovereign, 17% credit, 5% covered & Investment in currency further more ABS Possibility to invest1 in High Yield (<20%) • > 13,000 issues & 2,500 issuers or emerging market debt (<33%) if market • > 70 Countries conditions are right Government Bonds Off-benchmark universe Benchmark universe Global Currencies Global Investment Grade Global HY & EM Covered Bonds & ABSSource: Amundi, September 2012. Information given for indicative purposes only, may change without Amundi Funds Bond Global Aggregate - Citywire - November 2012 - page 7prior notice. The percentages given for high yield and emerging market debt are internal constraintsonly.1 For further details on the investment policy, please refer to the Amundi Funds Prospectus
Why is global aggregate relevant? All-weather universeSource: Barclays. Amundi Funds Bond Global Aggregate - Citywire - November 2012 - page 8Past performance is not necessarily a guide to future performance. Investors may not get back theamount they originally invest
Attractive performance Calendar Year Net Performance as at 31 October 2012 31.67% Amundi Funds Global Aggregate USD30% Barclays Global Aggregate (Hedged USD)25%20% 19.03%15% 12.21% 10.78%10% . 7.79% 5.58% 5.40% 5.37% 5.09% 4.61% 5.08%5% 1.07% 0.08%0%-5% -4.92% 2007 2008 2009 2010 2011 2012 Since Inception (Annualised) Annualized Information Annualized performance out-performance ratio 1 year +16.09% +10.01% 1.9 3 years +8.40% +3.35% 0.5 Since October 2007 +12.21% +6.85% 1.0* Net of management fee of 0.45% p.a., admin fee of 0.2%. and perf. fee of 20% above benchmark p.a.Source: Amundi – Since inception performance from adoption of current investment process. Amundi Funds Bond Global Aggregate - Citywire - November 2012 - page 10Net performance of Amundi Funds Bond Global Aggregate (IU-C).Past performance is not necessarily a guide to future performance. Investors may not get back the amount they originally invest
A “full cycle” product: sources of excess return are dynamic over time Portfolio attribution 40.0% 30.0% 20.0% 10.0% 0.0% -10.0% -20.0% 2008 2009 2010 2011 2012 Duration Country Allocation Curve Allocation Credit Allocation Trading Emerging Debt CurrencyPerformance attribution expressed as an absolute percentage of the contribution gross performance.Gross portfolio attribution of Amundi Funds Bond Global Aggregate for 2010 to 2012.Gross portfolio attribution of the strategy for 2008 and 2009 (for information purposes only).Source: Amundi. Data as at October 2012. Information given for indicative purposes only.Past performance is not necessarily a guide to future performance. Investors may not get back the Amundi Funds Bond Global Aggregate - Citywire - November 2012 - page 11amount they originally investThe sub-fund does not offer any capital or performance guarantee.
Complementary management style and drivers of returns Amundi Funds Bond Global Aggregate is different from the competition Perfect complement to competitors in the global fixed income space 50/50 portfolio may provide noticeably lower risk and very good returns1 Top-Down Multi-dimensional management provides different sources of alpha Risk Budgeting Bottom-Up Strong internal research lets portfolio construction contribute to returns Benchmark Agnostic approach emphasizes total return, tapping value Agnostic wherever it exists while providing diversification Recent performance is driven by credit & developed FX strategies Bond market stress still provides a buying opportunity1Source: Amundi, September 2012. Information given for indicative purposes only. Amundi Funds Bond Global Aggregate - Citywire - November 2012 - page 12Past performance is not necessarily a guide to future performance. Investors may not get back theamount they originally investPast market data are no reliable indicators for current or future data.The sub-fund does not offer any capital or performance guarantee
Alpha creationThree normally low-correlated asset classes / three angles Strategic views Directional Relative Value Tactical management Country allocation Bond selection Bonds Duration Curve allocation Short-term trading G4 allocation EM currency allocation Currencies $ exposure Intra-bloc allocation Short-term trading Market/industry Credit Credit exposure Macro sector allocation Bond selection EMD relative value External / Local debt Corporate Emerging Emerging exposure Region, country, curve Bond selection Emerging Exposure Short-term tradingSource: Amundi. Amundi Funds Bond Global Aggregate - Citywire - November 2012 - page 13Information given for indicative purposes only, may change without prior notice.
A clear decision-making processCore views Qualitative views expressed as a score, on a 9-point scale from very negative (-4) to very positive (+4) Made upon any type of argument (macro-eco, valuation, flows,…) Meetings (with clients) as market conditions dictate Multiple investment horizons Views only on strategies where we have a strong conviction Formalised in a single documentSource: Amundi. Views as at 07/11/12. See also disclaimer page. Amundi Funds Bond Global Aggregate - Citywire - November 2012 - page 14This slide shows a snapshot of the positions to illustrate the team investment process. They do notrepresent current or future views of the Amundi team and are not a forecast of actual events. Amundiviews are subject to change.”
Strategic orientation 2012-2013 Global growth remains anaemic and heterogeneous. The Eurozone and the UK are flirting with recession while the Chinese and Japanese economies have surprised to the downside. The US, to the contrary, are continuing to deliver positive macro surprises. G-4 central banks have taken monetary accommodation to a new level. As a result, financial and macroeconomic tail risks have been capped. Overall, macro visibility has improved as risks from the negative confidence effect of the Eurozone crisis have eased and reduced tail risk has led to a reduction in uncertainty. Strong flows continue to support emerging and credit the “hunt” for yield in a low rate environment. As macro calls are disturbed by political decisions and unorthodox Central Bank policies, investment horizon has shortened. High uncertainty and low visibility where active management & portfolio construction are key.Source: Amundi. Information given for indicative purposes only. Amundi Funds Bond Global Aggregate - Citywire - November 2012 - page 15Past market data are no reliable indicators for current or future data.
Amundi Funds Bond Global Aggregate today Equilibrate risk allocation Yield 4.21% Attractive yield Duration 3.8 Average Rating BBB+ Limited specific risk Number of securities 190 Asset Allocation Geographic Allocation Rating breakdownSource: Amundi. Data as of end-October 2012. Amundi Funds Bond Global Aggregate - Citywire - November 2012 - page 16Past performance is not necessarily a guide to future performance. Investors may not get back theamount they originally investStrategies given for indicative purposes only, may change without prior notice.
A constructive view on credit… Overweight: – Short-term credit vs. long-term credit to capture attractive spreads – US and European core countries of issuers with recent reinforcement of peripherals Attractive valuation’s on prime quality MBS Active use of credit derivatives to protect the sub-fund vs. adverse scenarios1 Benefit from attractive yields & flows to support EM1 Issuer selection supported by recommendations from a large and experienced credit research team Breakdown by sector Breakdown by senioritySource: Amundi. Portfolio data as of end-October 2012. Amundi Funds Bond Global Aggregate - Citywire - November 2012 - page 17Past performance is not necessarily a guide to future performance. Investors may not get back the amount theyoriginally investStrategies given for indicative purposes only, may change without prior notice within the limits stated in the prospectus .1 The sub-fund does not offer any capital nor performance guarantee
…And Combined With Active Currency Management Breakdown by currency Preference: – USD vs. developed markets currencies – Emerging markets currencies vs. developed markets currencies Use of options in order to increase convexity Tail risk hedgeSource: Amundi. October 2012. Amundi Funds Bond Global Aggregate – November 2012 - page 18Strategies given for indicative purposes only, may change without prior notice within the limits stated inthe prospectus .
DisclaimerThis document contains information about Amundi Funds Bond Global Aggregate (the “Sub-Fund”), a sub-fund of Amundi Funds (the “SICAV”), an undertaking for collectiveinvestment in transferable securities existing under Part I of the Luxembourg law of 17 December 2010, organised as a société d’investissement à capital variable and registeredwith the Luxembourg Trade and Companies Register under number B68.806. The SICAV has its registered office at 5, allée Scheffer, L-2520 Luxembourg.Amundi Funds has been authorised for public sale by the Commission de Surveillance du Secteur Financier in Luxembourg.Subscriptions in the Sub-Funds will only be accepted on the basis of the SICAV’s latest prospectus and/or the Key Investor Information Document (KIID) of the sub-fund, its latestannual and semi-annual reports and its articles of incorporation that may be obtained, free of charge, at the registered office of the SICAV or respectively at that of therepresentative agent duly authorized and agreed by the relevant authority of each relevant concerned jurisdiction.Consideration should be given to whether the risks attached to an investment in the Sub-Funds are suitable for prospective investors who should ensure that they fullyunderstand the contents of this document. A professional advisor should be consulted to determine whether an investment in the Sub-Funds is suitable.The value of, and any income from, an investment in the Sub-Funds can decrease as well as increase. The Sub-Funds have no guaranteed performance. Further, pastperformance is not a guarantee or a reliable indicator for current or future performance and returns. The performance data do not take account of the commissions and costsincurred on the issue and redemption of units.This document does not constitute an offer to buy nor a solicitation to sell in any country where it might be considered as unlawful, nor does it constitute public advertising orinvestment advice.The information contained in this document is deemed accurate as at November 2012.This material is solely for the attention of institutional, professional, qualified or sophisticated investors and distributors. It is not to be distributed to the general public, privatecustomers or retail investors in any jurisdiction whatsoever nor to “US Persons”.Moreover, any such investor should be, in the European Union, a “Professional” investor as defined in Directive 2004/39/EC dated 21 April 2004 on markets in financialinstruments (“MIFID”) or as the case may be in each local regulations and, as far as the offering in Switzerland is concerned, a “Qualified Investor” within the meaning of theprovisions of the Swiss Collective Investment Schemes Ordinance of 23 June 2006 (CISA), the Swiss Collective Investment Schemes Ordinance of 22 November 2006 (CISO)and the FINMA’s Circular 08/8 on Public Offering within the meaning of the legislation on Collective Investment Schemes of 20 November 2008. In no event may this material bedistributed in the European Union to non “Professional” investors as defined in the MIFID or in each local regulation, or in Switzerland to investors who do not comply with thedefinition of “qualified investors” as defined in the applicable legislation and regulation. Amundi, French joint stock company (“Société Anonyme”) with a registered capital of € 584 710 755 and approved by the French Securities Regulator (Autorité des Marchés Financiers-AMF) under number GP 04000036 as a portfolio management company 90 boulevard Pasteur -75015 Paris- France – 437 574 452 RCS Paris. www.amundi.com- www.amundi-funds.com Amundi Funds Bond Global Aggregate - Citywire - November 2012 - page 20
DisclaimerThis document is for your information only. It does not constitute an advertisement, offer, invitation, commitment,advice or recommendation to make a purchase of securities or enter into any such transaction. It is personal andconfidential and may not be copied or distributed to anyone or in any jurisdiction that would make such distributionunlawful.The information contained herein has been obtained from sources believed to be reliable but has not beenindependently verified, although Amundi and its affiliated companies (“Amundi”) believe it to be fair and notmisleading. Such information is solely indicative and may be subject to modification from time to time and should beread in conjunction with the appropriate offering document. We do not accept any liability whatsoever whether director indirect that may arise from the use of information contained in this document. Amundi, its associates, directors,connected parties and/or employees may from time to time have interests and or underwriting commitments in theinvestments mentioned in this document.Amundi does not guarantee that all risks associated to the transactions mentioned herein have been identified, nordoes it provide advice as to whether you should enter into any such transaction.Past performance is not indicative of future performance. Amundi does not make any representation as to the merits,suitability, expected success, or profitability of any such transaction mentioned herein.You must make your own assessment of any such transaction and the risks and benefits associated with it and of allthe matters referred to above. You should enter into transactions only after having considered, with the assistance ofits external advisors, the specific risks of any such transaction.Amundi Singapore Limited168 Robinson Road#24-01 Capital TowerSingapore 068912Company Registration Number: 198900774E Amundi Funds Bond Global Aggregate - Citywire - November 2012 - page 21