CANADIAN FIXED INCOME ALLOCATIONS Canadian investors are - - PowerPoint PPT Presentation
NEI Global Total Return Bond Fund Managed by Amundi Asset Management Tapping value wherever it exists. A broad fixed income and currency universe. Full cycle product . CANADIAN FIXED INCOME ALLOCATIONS Canadian investors are over-exposed to
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Source: Barclays, as of June 30, 2014 Source: CIFSC/Investor Economics, as of March 31, 2014
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0% 2% 4% 6% 8% 10% 12% 1989 1992 1995 1998 2001 2004 2007 2011 2014 0% 100% 200% 300% 400% 500% 600% FTSE TMX Canada Universe Cumulative Return (Right Axis) Government of Canada 10-Year Bond Yield (Left Axis)
Source: Bloomberg and FTSE TMX Global Debt Capital Markets, monthly data from July 31, 1989 to June 30, 2014
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Source: FTSE TMX Canada Universe, as of June 30, 2014.
Government of Canada Yield Curve Canadian Bond Market by Sector
Source: Bloomberg, as of June 30, 2014. Sector (% of total) Government 69.94% Sub-sector (% of sector) Federal 53.13% Provincial 44.25% Municipal 2.63% Sector (% of total) Corporate 30.06% Sub-sector (% of sector) Financial 47.24% Energy 13.77% Infrastructure 13.81% Communication 10.08% Industrial 7.15% Real Estate 4.62% Securitization 3.33%
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Source: HRSDC calculations based on Statistics Canada Source: Bloomberg Portfolio Scenario Analysis tool, June 30 2014
0% 5% 10%
Source: Bloomberg, monthly data from July 31, 1989 to June 30, 2014
Rate Change +0.25% +0.50% +1.00% +2.00% Profit/Loss
Government of Canada 10Yr Bond Yield Population 65+ Interest rate changes and corresponding profit/loss of FTSE TMX Canada Universe Bond
1971 1991 2011 2031 2051 8% 11.5% 14.4% 22.8% 24.7%
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Global Fixed Income Returns Global Fixed Income Returns
Country
Yield on 10-Year Government Bond
Australia 3.55% Italy 2.85% UK 2.67% Spain 2.66% US 2.53% Canada 2.24% France 1.70% Germany 1.25% Japan 0.57%
Source: Bloomberg, June 30, 2014 Source: Barclays and FTSE TMX Global Debt Capital Markets, annual returns from 2004 to 2013.
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Leading institutional asset manager
two major banking groups: 80% Crédit Agricole and 20% Société Générale
considered a global market leader in Global Fixed Income
Culture of transparency and risk management
Laurent Crosnier Chief Investment Officer Pascal Dubreuil Senior Portfolio Manager Romain Mercier Portfolio Manager
Comprehensive Resources:
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The team, located in London, collaborates with investment experts from Amundi’s global, developed and emerging sovereign, corporate credit and currency teams
Source: Amundi
GFI & Asian Fixed Income Global Fixed Income Absolute Return & Currency Amundi UK Limited Amundi Smith Breeden Singapore & Kuala Lumpur London London London Durham, USA
H.J. Koh
Global Bonds Global Aggregate Global Corporate EMD Absolute Return Currency Insurance Solutions Global Fixed
P.Hayden (Q1-2014)
+ Junior PM
t.b.a.
Laurent Crosnier
CIO - Amundi London Branch & CEO/CIO - Amundi (UK) Ltd
Cedric Morisseau
Head of Global Bonds, Absolute Return and Currency
Product Specialists Singapore UK Limited
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Broad Universe Investing in government bonds, currencies, credit & emerging market debt Physical instruments & derivatives Flexible Style Dynamic risk allocation within and across asset classes Portfolio balance & Target tracking error of 4.5% Unbiased Approach Targeting consistent excess return by being long and short across a wide range of risk exposures Benchmark + 3% p.a. Conviction Team-based approach to detect pertinent global macro themes and build strong strategic views Experienced & complementarity Investment Horizon Combining long-term macro views with tactical management Identification of long term & short term market drivers
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The most global benchmark universe: Barclays Global Aggregate Hedged Global Investment Grade 68% Sovereign, 16% Credit, 16% Covered & ABS +14,000 Issues & 2,500 Issuers +70 Countries NEI Global Total Return Bond Fund:
non-OECD issuers (min 50% OECD)
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Source : Amundi, as of June 30, 2014 *Amundi Funds Bond Global Aggregate / Portfolio inception date: October 30 2007
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Net Portfolio Annualized Net Relative Annualized Net Information Ratio Net Sharpe Rolling 1 year
+4.81%
0.21 1.89
Since Inception
+10.56% +5.86% 0.97 1.64
Source: Amundi, as of June 30, 2014 *Mercer **Amundi Funds Bond Global Aggregate (IU-C) / Portfolio inception date: October 30 2007 Net of management fees
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Amundi Funds Bond Global Aggregate - Performance attribution graph expressed as an absolute percentage of the contribution gross performance. Allocation given for indicative purposes only, may change without prior notice. Source : Amundi. Data as at end December 2013
2008 2009 2010 2011 2012 2013 OECD Bonds 0.84 7.00 0.56 0.95 1.05 2.36 Global bond exposure 0.48
1.65
1.36 Country allocation 0.05 3.92 0.72 0.66 0.24 1.41 Yield curve segment allocation 0.31 3.18
2.69 0.58
Bond selection 0.00 0.00
0.64
Credit 1.61 17.36 3.97
6.74 1.97 Credit exposure 0.95 8.23 1.34
1.43 0.78 Market/Industry 0.00 4.38 0.52
1.81 0.70 Corporate bonds selection 0.00 4.75 2.11
3.50 0.49 Emerging market exposure 0.66 0.54 1.03 0.05 2.46
Currency allocation 0.06 5.50 2.58
6.90 2.76 Trading 0.44 4.48 1.15 0.60 0.00 0.00 TER
Total net out-performance 2.21 26.58 6.16
15.62 5.32 Ex-post tracking error 7.55 5.36 4.51 9.91 4.24 3.16 Information ratio 0.29 4.96 1.37
3.67 1.68 Absolute Portfolio Performance 7.79 31.66 10.78
21.34 5.18
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8% 6% 4% 2% 0% Benchmark Performance Portfolio Performance 6.1% 7.3%
* NEI Global Total Return Bond Fund, As of June 30th 2014, Since inception (Sept 2013)
Upside Capture Ratio Downside Capture Ratio NEI Global Total Return Bond Fund A 82.2%
Barclays Global Aggregate CAD Hedged 100% 100%
Source: NEI Investments and Barclays, 2013-10-01 to 2014-06-30
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12.7% 8.1% 14.9% 45.4% 9.6% 0.0% 0.0% 0.0% 0.0% 1.5% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% AAA AA A BBB BB B CCC CC C NR
* NEI Global Total Return Bond Fund, As of June 30th 2014
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10.5% 16.6% 25.1% 12.7% 17.2% 5.8% 4.5% 0% 5% 10% 15% 20% 25% 30% 0-1 yr 1-3 yr 3-5 yr 5-7 yr 7-10 yr 10-20 yr 20+ yr Portfolio Benchmark
* NEI Global Total Return Bond Fund, as of June 30th 2014 **Yield to maturity of the bonds and derivatives plus cash rate for currency.
* NEI Global Total Return Bond Fund, As of June 30th 2014
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Yield ratios remain attractive
European spread remains attractive in light of a supportive monetary policy environment
Better rating & compelling yield pick-up
11.1% 0.7% 2.0% 25.4% 0.3% 2.1% 1.7% 0.5% 0.4% 3.7% 4.3% 1.1% 6.3% 5.8% 22.4% 2.9% 0% 10% 20% 30% 40% 50% ABS Agencies Auto Banks & Bldg Soc. Capital Goods Chemicals
EM Sovereign Ext. EM Local Energy Insurers
Treasuries Utilities Portfolio Benchmark
* NEI Global Total Return Bond Fund, As of June 30th 2014
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18.7% 11.4% 9.8% 8.2% 8.0% 7.1% 5.8% 3.6% 3.4% 3.2% 2.2% 1.6% 1.4% 1.4% 1.0% 0% 5% 10% 15% 20% 25% 30% 35% 40% Italy Portugal France Germany US UK Spain Netherlands Belgium Ireland Brasil Switzerland Mexico South Africa Turkey Portfolio Benchmark
GOVIES CREDIT SECURITIZED TOTAL ITALY 6.4 7.7 4.6 18.7 PORTUGAL 6.6 1.8 3.1 11.5 FRANCE 8.7 1.1 9.8 GERMANY 3.1 5.0 8.1 USA 4.4 3.6 8.0 UNITED KINGDOM 1.3 4.5 1.2 7.0 SPAIN 1.8 4.0 5.8 NETHERLANDS 2.5 1.1 3.6 BELGIUM 0.8 2.6 3.4 IRELAND 1.8 1.4 3.2 BRAZIL 1.1 1.1 2.2 MEXICO 1.1 0.3 1.4 SOUTH AFRICA 1.4 1.4 Others 4 3.3 0.3 7.6 32.0 46.9 12.8 91.7
* NEI Global Total Return Bond Fund, As of June 30th 2014
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* NEI Global Total Return Bond Fund, As of June 30th 2014
5% 15% USD GBP MXN NOK HUF BRL CAD CHF JPY NZD EUR
0% 10% 20% 30%
USD Bloc USD-EMG Bloc EUR-EMG Bloc EUR Bloc JPY Bloc Commodity Bloc
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Rationale
negative for global bond markets
periphery reducing safe- heaven appeal for bonds
“reflating” its economy
decoupling
Rationale
attractive vs. bond yields
European credit vs. US, Asian and UK credit
leveraging cycle and M&A within the industrial sector
Rationale
exit from QE positive. US-EUR yield differentials rising; USD Still undervalued
currencies
selectively (carry)
Rationale
signs of improvement
to rebound but continued pressure from rising US yields
more limited interest rate risk
Positions
30- year bonds Positions
credit Positions
CAD, NZD Positions
Mexico (2018), Brazil (2015-17), South Africa (2018) Global Bond View Interest rates to rise, impacting mostly the 5-year bonds Credit View Positive on Credit, still compelling Yield ratios Currency View USD, GBP outperform EUR; Overvalued commodity currencies Emerging markets View Selective on Emerging Markets Positive on short term Local Debt
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For illustration purposes only. Analysis is based on historical return and correlation sourced from Amunid and FTSE TMX Global Debt Capital . Canadian Bonds is represented by FTSE TMX Canada Universe and Global Bonds is represented by Amundi Fds Bd Global Aggregate IU-C hedged into CAD for the period of September 31, 2007 (the fund’s inception date) to June 30, 2014.
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Global Aggregate
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The information and opinions in this report were prepared by NEI Investments for internal and professional Advisor use only. NEI Investments endeavors to ensure that the contents have been compiled or derived from sources that we believe are reliable and contain information and opinions that are accurate and complete. However, NEI Investments makes no representation or warranty, express or implied, in respect thereof, takes no responsibility for any errors and omissions contained herein. Mutual funds are sold by prospectus
Commissions, trailing commissions, management fees, and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be
Investments L.P.
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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, private customers 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 financial instruments (“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 the provisions of the Swiss Collective Investment Schemes Ordinance of 23 July 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 be distributed 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 the definition of “qualified investors” as defined in the applicable legislation and regulation. Issued by Amundi London Branch, which is authorized by the Autorité des Marchés Financiers and subject to limited regulation by the Financial Conduct Authority for the conduct of investment business in the United Kingdom. Details about the extent of regulation by the Financial Conduct Authority are available on request. This report is for information purposes for professional investors only and is not intended as an offer or solicitation with respect to the purchase or sale of securities. Opinions and estimates may be changed without notice. It may not be copied or distributed to any other person and must not be distributed to retail clients in the UK. Investment in the fund should be made
a guide to future returns. Investment Views shown are valid as at the date stated and are presented to illustrate the team process. They do not necessarily represent the current or future views of the Amundi team and are not a forecast of actual events. Nor should the be construed as investment advice. Amundi’s views are subject to change. This material is provided for information purposes only and does not constitute a recommendation, a solicitation, an offer, an advice or an invitation to purchase or sell any fund, SICAV, sub-fund, (“the Funds”) described herein and should in no case be interpreted as such. This material, which is not a contract, is based on sources that Amundi considers to be reliable. Data, opinions and estimates may be changed without notice. Amundi accepts no liability whatsoever, whether direct or indirect, that may arise from the use of information contained in this material. Amundi can in no way be held responsible for any decision or investment made on the basis of information contained in this material. The information contained in this document is disclosed to you on a confidential basis and shall not be copied, reproduced, modified, translated or distributed without the prior written approval of Amundi, to any third person or entity in any country or jurisdiction which would subject Amundi or any of “the Funds”, to any registration requirements within these jurisdictions or where it might be considered as unlawful. Accordingly, this material is for distribution solely in jurisdictions where permitted and to persons who may receive it without breaching applicable legal or regulatory requirements. Not all funds, or sub-funds will be necessarily be registered or authorized in all jurisdictions or be available to all investors. Investment involves risk. Past performances and simulations based on these, do not guarantee future results, nor are they reliable indicators of futures performances. The value of an investment in the Funds, in any security or financial product may fluctuate according to market conditions and cause the value of an investment to go up or
All investors should seek the advice of their legal and/or tax counsel or their financial advisor prior to any investment decision in order to determine its suitability. It is your responsibility to read the legal documents in force in particular the current French prospectus for each fund, as approved by the AMF, and each investment should be made on the basis of such prospectus, a copy of which can be obtained upon request free of charge at the registered office of the management company. The information contained in this document is deemed accurate as at January 2014. Disclaimer for Amundi Funds Amundi Funds is a Luxembourg registered UCITS and is an umbrella company comprising various sub-funds. It is a recognized collective investment scheme under S.264 of the UK Financial Services & Markets Act 2000.
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Amundi Canada Inc., 2000 McGill College Avenue, Suite 1920 Montreal QC H3A 3H3 (“Amundi Canada”), is a corporation incorporated under the laws of Canada and a wholly-owned subsidiary of Amundi, a corporation incorporated under French law. Both are indirectly held jointly by Crédit Agricole (to the level of 75 %) and Société Générale (to the level of 25 %), two banks incorporated under French law which have agreed to combine their asset management activities under the name of “Amundi”. Asset management services in respect of the above-mentioned client provided for pursuant to the portfolio management agreement entered into between Amundi Canada and such client has been delegated by Amundi Canada to Amundi, pursuant to sub-advisor agreements entered with Amundi. Amundi Canada is registered as portfolio manager in the provinces of Quebec, Nova Scotia, Ontario, Alberta and British Columbia. Amundi Canada is also registered as an exempt market dealer in the same provinces, except in Nova Scotia. The information provided herein is confidential and is addressed exclusively to Canadian institutional investors and to any other exempt category within the meaning of the applicable laws. This information is not meant to be distributed or used by any person or entity in a country or jurisdiction where such distribution or use would be contrary to legal or regulatory requirements, or would obligate Amundi Canada or its affiliates (together, the “Crédit Agricole group”) to any registration requirements in such country or
investment advice regarding a security, an offer or solicitation by Amundi Canada or by any member of the Crédit Agricole group to provide an advice or a financial, legal, fiscal
that the information provided herein is exact, complete or current.