In today’s markets, what exactly is the trend?
Pundits have forecast the end of negative rates so many times they (almost) gave up. Now we are all trying to forecast when rate hikes will stop.
Inflation? Forecasts are undecided.
Recession? Will central bankers brilliantly balance energy costs and interest
Quantitative tightening? At the very least, accommodation is no longer the norm, and central bank balance sheets are big.
Climate risk? We think so.
Geopolitical risk? Clearly!
Candriam Bonds Credit Alpha: No time like the present
Is now the time to put alpha ahead of beta? To consider absolute performance strategies in credit? Directionless markets – or worse, declining markets – are not times to follow the trend. Today’s rising volatility makes it difficult to actually capture any market returns that do exist.
There’s no time like the present to make a change and adjust your allocations. Some might argue that your real friend is not the trend, but decorrelation -- in any market.
To pursue both decorrelation and alpha, now might be the time to consider absolute return products. The Candriam Bonds Credit Alpha fund is an actively-managed, bottom-up, and dynamic investment process. Interested in learning more?
Discover our investment process
Risks
The main risks of the fund are:
Risk of capital loss: there is no guarantee for investors relating to the capital invested in the sub-fund in question, and investors may not receive back the full amount invested.
Interest rate risk: a change in interest rates, resulting notably from inflation, may cause a risk of losses and reduce the net asset value of the sub-fund (particularly in the event of a rate increase if the sub-fund has a positive rate sensitivity and in the event of a rate decline if the sub-fund has a negative rate sensitivity). Long term bonds (and related derivatives) are more sensitive to interest rate variations.
A change in inflation, in other words a general rise or fall in the cost of living, is one of the factors potentially affecting interest rates and consequently the NAV.
Volatility risk: a sub-fund may be exposed (taking directional positions or using arbitrage strategies for example) to market volatility risk and could therefore, based on its exposure, suffer losses in the event of changes in the volatility level of these markets.
Credit risk: Risk that an issuer or a counterparty will default. This risk includes the risk of changes in credit spreads and default risk.