Philippe DEHOUX
Head of Global Bonds
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About this fund
Candriam Bonds Euro Diversified (hereafter "the fund"), a sub-fund of the Candriam Bonds sicav, aims to use discretionary management to benefit from the performance of the market in bonds denominated mainly in EUR, issued by highly rated eurozone issuers of all types and with a maturity of between 1 and 10 years, and to outperform the benchmark. The fund may be appropriate for investors who wish to achieve this objective over a medium investment holding period and who are aware of, understand and are able to bear the specific risks of the fund. The Fund promotes, among other characteristics, environmental and/or social characteristics without however having a sustainable investment objective. The investment horizon is 3 years. The fund is actively managed and the investment process implies referring to a benchmark index. For further information on the risks or the benchmark and its use, please consult the fund’s key information document (KID).
Principal assets traded:
Bonds and other debt securities denominated in euros, issued by private issuers, issued or guaranteed by governments, international and supranational organisations and public entities and semi-public issuers with a minimum rating of BBB-/Baa3 (or equivalent) by at least one of the independent rating agencies or considered to be of comparable quality by the Management Company (particularly in cases where the issue has not been rated) and with a term of between 1 and 10 years.
Investment strategy:
The fund seeks to achieve capital growth by investing in the principal assets traded and to outperform the benchmark.
The management team makes discretionary investment choices based on economic/financial analyses.
The fund promotes, among other characteristics, environmental and/or social characteristics but does not have sustainable investment as its objective. Environmental, social and governance (ESG) criteria contribute to the asset manager's decision-making but are not a decisive factor in this decision-making. For more information, please see the management company's website and/or the prospectus.
The fund may make use of derivative products for both investment and hedging purposes (to protect against future unfavourable financial events).
Benchmark: Bloomberg Euro-Aggregate 1-10 Year (Total Return).
The fund is managed actively and the investment approach implies a reference to a benchmark (the index).
Benchmark definition:
The index measures the performance of investment grade bonds denominated in EUR with maturities between 1 and 10 years.
Use of the benchmark:
- as an investment universe. In general, the issuers of financial instruments contained in the fund portfolio are mostly contained in the index. However, investments outside this index are authorised,
- in determining risk levels/parameters,
- for performance comparison purposes,
- to calculate the performance fee for some share classes.
Divergence of portfolio composition from the benchmark:
As the fund is managed actively, it does not aim to invest in each component of the index nor to invest in the same proportions as the components of the index.
In normal market conditions, the expected tracking error of the fund will be limited to moderate, namely between 0.4% and 1.5%.
This measure is an estimation of the divergence of the fund’s performance compared to the performance of the benchmark. The greater the tracking error, the greater the deviations from the benchmark index. The actual tracking error depends in particular on market conditions (volatility and correlations between financial instruments) and may therefore differ from the expected tracking error.
Bonds and other debt securities denominated in euros, issued by private issuers, issued or guaranteed by governments, international and supranational organisations and public entities and semi-public issuers with a minimum rating of BBB-/Baa3 (or equivalent) by at least one of the independent rating agencies or considered to be of comparable quality by the Management Company (particularly in cases where the issue has not been rated) and with a term of between 1 and 10 years.
Investment strategy:
The fund seeks to achieve capital growth by investing in the principal assets traded and to outperform the benchmark.
The management team makes discretionary investment choices based on economic/financial analyses.
The fund promotes, among other characteristics, environmental and/or social characteristics but does not have sustainable investment as its objective. Environmental, social and governance (ESG) criteria contribute to the asset manager's decision-making but are not a decisive factor in this decision-making. For more information, please see the management company's website and/or the prospectus.
The fund may make use of derivative products for both investment and hedging purposes (to protect against future unfavourable financial events).
Benchmark: Bloomberg Euro-Aggregate 1-10 Year (Total Return).
The fund is managed actively and the investment approach implies a reference to a benchmark (the index).
Benchmark definition:
The index measures the performance of investment grade bonds denominated in EUR with maturities between 1 and 10 years.
Use of the benchmark:
- as an investment universe. In general, the issuers of financial instruments contained in the fund portfolio are mostly contained in the index. However, investments outside this index are authorised,
- in determining risk levels/parameters,
- for performance comparison purposes,
- to calculate the performance fee for some share classes.
Divergence of portfolio composition from the benchmark:
As the fund is managed actively, it does not aim to invest in each component of the index nor to invest in the same proportions as the components of the index.
In normal market conditions, the expected tracking error of the fund will be limited to moderate, namely between 0.4% and 1.5%.
This measure is an estimation of the divergence of the fund’s performance compared to the performance of the benchmark. The greater the tracking error, the greater the deviations from the benchmark index. The actual tracking error depends in particular on market conditions (volatility and correlations between financial instruments) and may therefore differ from the expected tracking error.
Investment Team
Sylvain DE BUS
Deputy Head of Global Bonds
Yohanne LEVY
Fund Manager
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Fixed Income, Adapt to thriveAdapt to thrive in the Fixed Income Jungle
Over a decade ago negative rates started looming, creating an unprecedented environment. Well the Fixed Income space is definitely the opposite, a lush jungle dominated by the canopy, aka the AAA-AA ratings, covering an Investment Grade A to BBB ratings understory, down to the High Yield BB and lower ratings forest floor. -
Research Paper, Adapt to thrive, Louis De Langalerie, Diquel Dos Santos, ESG, SRI, Fixed IncomeThe Fair Value Enigma: Deciphering Fixed Income in Today's Economy
In an ever-evolving financial landscape dominated by data-driven decision-making and economic uncertainty, understanding the nuances of fixed income investing is paramount. -
Fund Range Information
The Funds Range Information gives you the latest modifications to the Candriam funds range. -
Switzerland - Communication to stakeholders
In the context of the change of our sicav/fcp, please find here the related communications to Switzerland professional or private investors.
Other information
This is a marketing communication. Please refer to the prospectus of the funds and to the key information document before making any investment decision. This marketing communication does not constitute an offer to buy or sell financial instruments, nor does it represent an investment recommendation or confirm any kind of transaction, except where expressly agreed. Although Candriam selects carefully the data and sources within this document, errors or omissions cannot be excluded a priori. Candriam cannot be held liable for any direct or indirect losses as a result of the use of this document. The intellectual property rights of Candriam must be respected at all times, contents of this document may not be reproduced without prior written approval.
Warning: Past performance of a given financial instrument or index or an investment service or strategy, or simulations of past performance, or forecasts of future performance does not predict future returns. Gross performances may be impacted by commissions, fees and other expenses. Performances expressed in a currency other than that of the investor's country of residence are subject to exchange rate fluctuations, with a negative or positive impact on gains. If the present document refers to a specific tax treatment, such information depends on the individual situation of each investor and may change.
In respect to money market funds, please be aware that an investment in a fund is different from an investment in deposits and that the investment’s principal is capable of fluctuation. The fund does not rely on external support for guaranteeing its liquidity or stabilizing its NAV per unit or share. The risk of loss of the principal is borne by the investor.
Candriam consistently recommends investors to consult via our website https://www.candriam.com the key information document, prospectus, and all other relevant information prior to investing in one of our funds, including the net asset value (“NAV) of the funds. Investor rights and complaints procedure, are accessible on Candriam’s dedicated regulatory webpages https://www.candriam.com/en/professional/legal-information/regulatory-information/. This information is available either in English or in local languages for each country where the fund’s marketing is approved.
According to the applicable laws and regulations, Candriam may decide to terminate the arrangements made for the marketing of a relevant fund at any time.
Information on sustainability-related aspects: the information on sustainability-related aspects contained in this communication are available on Candriam webpage https://www.candriam.com/en/professional/sfdr/. The decision to invest in the promoted product should take into account all the characteristics or objectives of the promoted product as described in its prospectus, or in the information documents which are to be disclosed to investors in accordance with the applicable law.Notice to investors in Switzerland: The information provided herein does not constitute an offer of financial instruments in Switzerland pursuant to the Swiss Financial Services Act ("FinSA") and its implementing ordinance. This is solely an advertisement pursuant to FinSA and its implementing ordinance for financial instruments.
Swiss representative: CACEIS (Switzerland) SA, Route de Signy 35, CH-1260 Nyon. The legal documents as well as the latest annual and semi-annual financial reports, if any, of the investment funds may be obtained free of charge from the Swiss representative.
Swiss paying agent: CACEIS Bank, Paris, succursale de Nyon/Suisse, Route de Signy, 35, CH-1260 Nyon.
Place of performance: Route de Signy 35, CH-1260 Nyon.
Place of jurisdiction: Route de Signy 35, CH-1260 Nyon.
ESG Assessment
The fund’s investment strategy aims to promote environmental or social characteristics, or a combination of these characteristics, provided that the entities in which the investments are made apply good governance practices. To achieve this objective, the management team makes discretionary investment choices based on an economic/financial analysis process and an internal analysis of environmental, social and governance (ESG) criteria, based in part on data provided by external service providers.
a. ESG selection criteria:
For corporates, the internal analysis of ESG criteria consists in selecting the issuers:
• that are the best positioned to meet the challenges of sustainable development;
• that comply with the principles of the United Nations Global Compact (i.e. human rights, labour law, the environment, anti-corruption), and which are therefore less exposed to the risks associated with these themes; and
• that are not engaged in controversial activities such as armament (securities of a company whose activity consists of manufacturing, the use or possession of anti-personnel mines, cluster bombs and/or depleted uranium weapons), tobacco, thermal coal.
For sovereign issuers, the internal analysis of ESG criteria consists in selecting:
• Countries that perform best across our four categories of sustainable development criteria: Human Capital, Natural Capital, Social Capital and Economic Capital;
• Countries that are not part of our highly Oppressive Regimes or dictatorships, based on the Freedom House Freedom in the World Index and the World Bank Voice & Accountability Index.
b. Selection methodology:
The issuers favoured by the management company are subject to a dual analysis:
• Analysis of their activity to assess their alignment with the major challenges of sustainable development. For example, regarding the transition to a circular economy, the management company will consider a company producing recycled steel to be more sustainable than a company producing steel exclusively from iron ore; and
• Analysis of how the company manages players interacting with the company: its employees, its customers, its shareholders, its suppliers and the environment. Here too, the management company will favour companies that adopt the most sustainable practices given their sector. For example, with regard to relations with its clients, the management company will favour pharmaceutical companies with balanced pricing practices and commercial policies. Similarly, with regard to relations with their employees, the management company attaches great importance to the fight against discrimination and compliance with social standards.
Our sovereign investible universe consists of those countries which perform best across our four categories of sustainable development criteria:
• Natural Capital: stock of naturel resources managed by the country;
• Social Capital: trust, norms and institutions which people can rely on to solve common problems and create social cohesion;
• Human Capital: human productivity to which the country participates through education and other initiatives;
• Economic Capital: assessing the level of economic activity viability.
c. A team of ESG analysts is responsible for assessing the selection criteria:
ESG analysis and selection are carried out by a dedicated team of ESG analysts within Candriam. This team is made up of specialists whose mission is to analyse the exposure of companies and governments to the risks and opportunities associated with sustainable development. Selection criteria are expected to evolve over time, based on advances in ESG research and changes in company practices.
The selection criteria will evolve over time, in line with advances in ESG research and changes in corporate practices.