Amundi funds bond global aggregate citywire asia hk_finalPresentation Transcript
Amundi Funds Bond Global Aggregate Tapping value wherever it exists Citywire December 2012This material is solely for the attention of "professional” investors, not for public distribution.(see more details and definitions at the end of the document).
Long-term, robust, macro-management in a global aggregate universe A broad universe 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 $509M 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%1 annualised net performance since inception versus 5.4%1 for the reference indicator1 Amundi Funds Bond Global Aggregate - Citywire - November 2012 - page 2Source: Amundi, September 2012. Information given for indicative purposes only, may change without prior notice. Past performance is not necessarily a guide to future performance. Investors may not get back the amount theyoriginally invest The 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 the investment and management style of the sub-fund1 Inception date of Amundi Funds Bond Global Aggregate 30/10/207, 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% Spread = 9.1% Asia Pacific Euro Asia Pacific DM exp. US DM exp. US Asia Pacific 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, 2005 & 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 Hedged 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-weathered 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 31st October 2012 31.67% Amundi Funds Global Aggregate USDUSD Amundi Funds Global Aggregate30% Barclays Global Aggregate Hedged 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 * 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 Oct. 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 10*Period: 1 January 2012 to 31 October 2012NAV-to-NAV, with dividend reinvested.Net 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 Duration Country Allocation Curve Allocation Credit Allocation Emerging Debt Currency Trading 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 Good complement to competitors in the global fixed income space 50/50 portfolio may potentially provide noticeably lower risk and impressive returns1 Top-Down Multi-dimensional management provides different sources of Risk Budgeting alpha 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 opportunity1 Source: Amundi. End of 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 14
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. September 2012. Amundi Funds Bond Global Aggregate - Citywire - November 2012 - page 18Strategies given for indicative purposes only, may change without prior notice within the limits stated inthe prospectus .
Clearly defined guidelines in more detail Management reference Barclays Global Aggregate Hedged indicator Tracking-Error (ex-ante) Maximum 4.5% p.a. (with 66% confidence level)1 Interest rate risk Active modified duration management within [0;8] bracket 1 Currency risk Hedged reference indicator but active currency management Investment universe Minimum 2/3 of assets to be invested in : - OECD government bonds - OECD corporate bonds - Investment grade ABS/MBS Minimum 80% of assets invested in investment grade instruments Typically, 100+ cash securities in the portfolio 1, active use of CDS 2 TM- Overall Morningstar RatingSource: Amundi, September 2012. Amundi Funds Bond Global Aggregate - Citywire - November 2012 - page 191 Internal guidelines given for indicative purposes only. May change without prior notice.Please refer to Amundi Funds prospectus for further details about the investment and management style of the sub-fund.2. Morningstar rating data source: 30 October 2012., Morningstar, Inc. All Rights Reserved. Universe: Global Bond. The information contained herein: (1) is proprietary to Morningstar and/or its contentproviders; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arisingfrom any use of this information. Past performance is no guarantee of future results. The rating concerns the IU class.
DisclaimerThe issuer of this document is Amundi Hong Kong Limited.This document is not intended as an offer or solicitation with respect to the purchase or sale of securities, including shares or units of funds. Allviews expressed and/or reference to companies cannot be construed as a recommendation by Amundi. Opinions and estimates may bechanged without notice. To the extent permitted by applicable law, rules, codes and guidelines, Amundi and its related entities accept noliability whatsoever whether direct or indirect that may arise from the use of information contained in this document.This document is for distribution solely to persons permitted to receive it and to persons in jurisdictions who may receive it without breachingapplicable legal or regulatory requirements. Any dissemination, reproduction, copy, modification or translation in whole or in part, with respect toany information provided herein is forbidden. This document is for professional investors only and not for retail investors.Some of the fund(s) mentioned in this document are not authorized by Securities and Futures Commission in Hong Kong. Consequently,shares or units of such funds are not available to the general public in Hong Kong and must not be distributed in Hong Kong by way of publicoffer, public advertisement or in any similar manner. This document has not been reviewed by any regulatory authority in Hong Kong and noregulatory authority in Hong Kong takes responsibility for the financial soundness of the funds or for the accuracy of any statement made oropinion expressed in this document. Investors are advised to exercise caution in relation to the offer. Any investor who is in doubt about thecontents of the document is strongly recommended to seek independent professional advice.This document is prepared for information only and does not have any regard to the specific investment objectives, financial situation and theparticular needs of any specific person who may receive this document. Investors should not only base on this document alone to makeinvestment decisions.Investment involves risk. The past performance information of the market, manager and investments and any forecasts on the economy, stockmarket, bond market or the economic trends of the markets which are targeted by the fund(s) are not indicative of future performance.Investment returns not denominated in HKD or USD is exposed to exchange rate fluctuations. The value of an investment may go down or up.The offering document(s) should be read for further details including the risk factors.The fund(s) may use financial derivatives instruments as part of the investment strategy and invest in securities of emerging markets or smallercompanies, or fixed-income securities. This involves significant risks and is usually more sensitive to price movements. The volatility of fundprices may be relatively increased. Issuers of fixed-income securities may default on its obligation and the fund(s) will not recover itsinvestment. Additional risk factors are described in the offering document(s). Investors are advised to be aware of any new risks that may haveemerged in the prevailing market circumstances before subscribing the fund(s). Amundi Funds Bond Global Aggregate - Citywire - November 2012 - page 20
Disclaimer This document contains information about Amundi Funds Bond Global Aggregate (the “Sub-Fund”), a sub-fund of Amundi Funds (the “SICAV”), an undertaking for collective investment 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 registered with 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 latest annual 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 the representative 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 fully understand 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, past performance 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 costs incurred 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 or investment 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 Funds Bond Global Aggregate - Citywire - November 2012 - page 21