FIXED INCOME
R-co Conviction High Yield SD Euro – Key points
Idiosyncratic risk is being repriced across a few stories ( SES, EutelSat, MantenCoop)
Investment team
No ETF products are available to replicate the SD market
Diversification is the best way to navigate in this negative convexity environment
Kristell Agaësse Head of High Yield and Convertibles Management
Dispersion is low at bonds level reducing the opportunity set for spread compression & alpha generation
At the Index CDS level, dispersion is high which brings opportunities at the tranche level (high default correlation)
Michael Longeard High Yield fund manager
Samuel Gruen Fixed Income Manager
Underweight Hybrids Corp (TCom, Utilities), Banks (esp. Tier2) and challenging refinancings (Maxeda, Victoria, Graanul, Auchan..).
Our WAL under 1 year. [max 3 years] We will reinvest maturing bonds progressively to benefit from higher rates/wider spreads.
Public
1 – Yield to Worst, or YTW, is the worst return a bond can earn without the issuer defaulting. The YTW allows the investor to know the highest maximum risk of a bond. The YTW is then used to calculate whether it is worthwhile to take a position in a particular bond. not be held liable for the information contained in this document and in particular for any decision taken on the basis of this information.. Source: Rothschild & Co Asset Management – 31/12/2024
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