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 Canadian fixed income Canadian Investors’ Allocation Canada’s Share of the to Canadian Bonds Global Bond Market 74% 2.7% Source: Barclays, as of Source: CIFSC/Investor June 30, 2014 Economics, as of March 31, 2014 2 ADVISOR USE ONLY
HISTORICAL CANADIAN BOND YIELDS AND RETURNS Strong Canadian bond returns were largely fueled by declining yields, now near their all-time lows Historical bond yields and bond returns in Canada 12% 600% 10% 500% 8% 400% 6% 300% 4% 200% 2% 100% 0% 0% 1989 1992 1995 1998 2001 2004 2007 2011 2014 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 3 ADVISOR USE ONLY
CURRENT STATE OF THE CANADIAN MARKET Canadian fixed income is low yielding and poorly diversified • Canadian rates and yields are near all-time lows • Canadian fixed income is highly concentrated in government, housing, and financial services Government of Canada Canadian Bond Market by Sector Yield Curve Sector (% of total) Sector (% of total) Corporate 30.06% Government 69.94% Sub-sector (% of sector) Sub-sector (% of sector) Financial 47.24% Federal 53.13% Energy 13.77% Provincial 44.25% Municipal 2.63% Infrastructure 13.81% Communication 10.08% Source: FTSE TMX Canada Industrial 7.15% Universe, as of June 30, 2014. Real Estate 4.62% Securitization 3.33% Source: Bloomberg, as of June 30, 2014. 4 ADVISOR USE ONLY
WHAT’S AHEAD Increasing demand for fixed income but low Canadian returns Interest rate changes and corresponding • Rising rates will impact returns profit/loss of FTSE TMX Canada Universe Bond • Demographics will lead to a greater Rate Change +0.25% +0.50% +1.00% +2.00% need for income Profit/Loss -1.84% -3.62% -7.01% -13.12% Source: Bloomberg Portfolio Scenario Analysis tool, June 30 2014 Government of Canada Population 65+ 10Yr Bond Yield 22.8% 24.7% 10% 14.4% 5% 11.5% 8% 0% 1971 1991 2011 2031 2051 Source: HRSDC calculations based on Source: Bloomberg, monthly data from Statistics Canada July 31, 1989 to June 30, 2014 5 ADVISOR USE ONLY
WHY GO GLOBAL? Global Fixed Income Returns The Benefits Yield on 10-Year Country • More selection Government Bond Australia 3.55% • Reduced risk through diversification Italy 2.85% • Higher yields and returns UK 2.67% Spain 2.66% • Currency management can reduce US 2.53% volatility and be a source of returns Canada 2.24% France 1.70% Germany 1.25% Japan 0.57% Global Fixed Income Returns Source: Bloomberg, June 30, 2014 Source: Barclays and FTSE TMX Global Debt Capital Markets, annual returns from 2004 to 2013. 6 ADVISOR USE ONLY
AMUNDI ASSET MANAGEMENT Firm Overview The Team Laurent Crosnier Leading institutional asset manager Chief Investment Officer • Formed by combining the asset management expertise of two major banking groups: Pascal Dubreuil 80% Crédit Agricole and 20% Société Générale Senior Portfolio Manager • Managing over U.S. $1 trillion Romain Mercier Culture of transparency and risk management Portfolio Manager • Amundi invests in all asset classes and major currencies • Leader in building innovative investment solutions • Amundi has won numerous investment awards and is Comprehensive Resources: considered a global market leader in Global Fixed Income • 20 Strategists / Economists • 24 Credit Analysts • 17 Quantitative Researchers • 14 SRI Analysts 7 ADVISOR USE ONLY
AMUNDI TEAM ORGANIZATION Multi-asset coverage under one roof breeds strong convictions The team, located in London, collaborates with investment experts from Amundi’s global, developed and emerging sovereign, corporate credit and currency teams Laurent Crosnier CIO - Amundi London Branch & CEO/CIO - Amundi (UK) Ltd Cedric Morisseau Head of Global Bonds, Absolute Return and Currency GFI & Asian Absolute Return & Amundi UK Amundi Smith Global Fixed Income Fixed Income Currency Limited Breeden Singapore & London London London Durham, USA Kuala Lumpur Global Global Absolute Insurance P. Jauer CIO Global Bonds EMD Currency Global Fixed Aggregate Corporate Return Solutions P. Chow L. Aderdor C. Morisseau P. Dubreuil+ G. Pesques S. Strigo F. Castaldi J. Kwok M. Styles (Q1-2014) R. Mercier P. Dubreuil+ T. Delabre Y. Casa R. Puri C. Chappuis R. Lim C. Morris+ C. Morris+ H.J. Koh R. Stefani S. Fawn M. Vydrine A. Burgues P.Hayden + Junior PM A. Beaudu t.b.a. T. Neo N. Nazlan K. Kamaruddin Source: Amundi Product Specialists Singapore UK Limited • Architects in Bold • (t) Trainee • +Member of more than one team J. Keller A. Bender J. Tay J. Shea • Singapore Team reports directly to L. Crosnier M. Lake L. Ben Lazrak (t) 8 ADVISOR USE ONLY
TAKING YOUR FIXED INCOME GLOBAL How to Successfully Manage Global Fixed Income Investing in government bonds, currencies, Physical instruments & Broad Universe credit & emerging market debt derivatives Dynamic risk allocation within and across Portfolio balance & Flexible Style asset classes Target tracking error of 4.5% Targeting consistent excess return by being long and short across a wide range of risk Unbiased Approach Benchmark + 3% p.a. exposures Team-based approach to detect pertinent Experienced & global macro themes and build strong Conviction complementarity strategic views Combining long-term macro views with Identification of long term & Investment Horizon tactical management short term market drivers 9 ADVISOR USE ONLY
THE BROADEST BENCHMARK An Even Wider Investment Universe The most global benchmark universe: NEI Global Total Return Bond Fund: Barclays Global Aggregate Hedged Global Investment Grade • Use of the broadest benchmark available 68% Sovereign, 16% Credit, 16% Covered & ABS • Investment in currency +14,000 Issues & 2,500 Issuers • High Yield bonds (min 75% IG), Debt of +70 Countries non-OECD issuers (min 50% OECD) 10 ADVISOR USE ONLY
A DISCIPLINED INVESTMENT PROCESS Generating Strong Strategic Views 11 ADVISOR USE ONLY
A DISCIPLINED INVESTMENT PROCESS Combining Strategic Views with Tactical Management Three angles of investment in normally low-correlated asset classes 12 ADVISOR USE ONLY
A DISCIPLINED INVESTMENT PROCESS Tapping value wherever it exists Flexible and Dynamic Asset Allocation Source : Amundi, as of June 30, 2014 *Amundi Funds Bond Global Aggregate / Portfolio inception date: October 30 2007 13 ADVISOR USE ONLY
A ‘FULL CYCLE’ PRODUCT 1st Quartile performance over 5 years * Calendar Year Net Performance Net Portfolio Net Relative Net Information Net Sharpe Annualized Annualized Ratio Rolling 1 year +4.81% -0.34% 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 14 ADVISOR USE ONLY
A ‘FULL CYCLE’ PRODUCT Sources of Excess Return are Dynamic Over Time Amundi Funds Bond Global Aggregate - Performance Attribution 2008 2009 2010 2011 2012 2013 0.84 7.00 0.56 0.95 1.05 2.36 OECD Bonds 0.48 -0.09 1.65 -2.39 -0.41 1.36 Global bond exposure 0.05 3.92 0.72 0.66 0.24 1.41 Country allocation 0.31 3.18 -0.93 2.69 0.58 -0.25 Yield curve segment allocation 0.00 0.00 -0.88 -0.01 0.64 -0.16 Bond selection 1.61 17.36 3.97 -8.71 6.74 1.97 Credit 0.95 8.23 1.34 -2.28 1.43 0.78 Credit exposure 0.00 4.38 0.52 -3.72 1.81 0.70 Market/Industry 0.00 4.75 2.11 -2.71 3.50 0.49 Corporate bonds selection 0.66 0.54 1.03 0.05 2.46 -0.02 Emerging market exposure 0.06 5.50 2.58 -2.71 6.90 2.76 Currency allocation 0.44 4.48 1.15 0.60 0.00 0.00 Trading -0.74 -8.30 -3.13 -0.50 -1.53 -1.75 TER 2.21 26.58 6.16 -10.32 15.62 5.32 Total net out-performance 7.55 5.36 4.51 9.91 4.24 3.16 Ex-post tracking error 0.29 4.96 1.37 -1.04 3.67 1.68 Information ratio 7.79 31.66 10.78 -4.92 21.34 5.18 Absolute Portfolio Performance 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 15 ADVISOR USE ONLY
MARKET CORRELATION Low Correlation with Benchmark and Other Funds 3-Year Correlation Matrix (1) (2) (3) (4) (5) (6) (1) Amundi Fds Bd Global Aggregate IU-C 1.00 -0.08 0.24 0.41 0.54 0.59 (2) FTSE TMX Canada Universe Bond -0.08 1.00 0.84 -0.35 -0.43 -0.4 (3) Barclays Global Aggregate TR Hdg USD 0.24 0.84 1.00 -0.13 -0.22 -0.14 (4) S&P/TSX Composite TR 0.41 -0.35 -0.13 1.00 0.73 0.77 (5) S&P 500 TR (IA Extended) 0.54 -0.43 -0.22 0.73 1.00 0.96 (6) MSCI World NR USD 0.59 -0.4 -0.14 0.77 0.96 1.00 Source: Amundi, Bloomberg, FTSE TMX, and Barclays. 16 ADVISOR USE ONLY
Recommend
More recommend
