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Event Voice: Your Questions Answered by Mirabaud Asset Management at the Channel Island Event


Can you give a brief overview of your strategy in terms of what you are trying to achieve for investors, your investment process and the make-up of the investment team?

Mirabaud Global Strategic Bond is an ‘all-weather, go anywhere’ core fixed income strategy designed to capture market upside while limiting market downside to deliver long-term attractive returns. 

We dynamically invest across the vast fixed income universe, adjusting positioning to optimise returns in different investment and economic landscapes. As the strategy is benchmark agnostic and highly flexible, we are not tied to a single sub-asset class. This allows us to pursue our best ideas across government bonds, investment grade corporates, high yield bonds and emerging market debt. 

We have an active policy of hedging both duration and credit risk when appropriate to mitigate volatility and protect the downside. This element is now more important than ever, given today’s investment landscape of continued economic and geopolitical uncertainty. 

Our top-down view is shaped by our monthly global macro meeting, which allows us to identify where we want to allocate from a regional perspective and guides us on duration and credit positioning. We then populate this macro view via bottom-up analysis, and each bond earns its place. ESG factors are fully integrated with traditional financial analysis, incorporating negative and positive exclusions as well as active engagement. The strategy has an SFDR Article 8 rating. 

The strategy is managed by Andrew Lake, Fatima Luis and Al Cattermole, with analytical support from the wider Fixed Income team, as well as our dedicated SRI team.

How are you currently positioning your portfolio?

We’re blending credit and duration – focusing on high-coupon, long-duration investment grade (IG), enhanced with select high-quality high yield (HY) exposures. This balances the narrative shifts between potential soft landing and recession scenarios. Short-term volatility is then managed via credit and interest-rate hedges.

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We believe the outlook for IG is appealing whether we ultimately face a soft landing or recession scenario. Overall IG yields are high with a c.100bps spread over US Treasuries, providing extra carry and compression in the event of a soft landing. The real benefit of this part of the portfolio is the protection in the recession scenario, where wider spreads should be more than compensated for by lower underlying government rates leading to significant positive returns.

For the more central case of a soft landing, then we believe high-quality high yield should outperform, as the new higher coupons more than compensate for the risk of default. We look for large, well-run companies, with good access to bond markets and the flexibility to navigate a rapidly changing macro outlook. We currently have around a 28% exposure in the strategy and are increasing that as the data moves away from a hard-landing narrative. 

Can you identify a couple of key investment opportunities for your fund you are playing at the moment in the portfolio? This could be at a stock, sector or thematic level.

The two key themes we are playing are US high yield and European duration to reflect the diverging outlooks for the two regions. European growth is expected to be much lower than in the US. German manufacturing and autos, in particular, are struggling to improve and are suffering from a Chinese hangover as exports fall. To us, this makes it more likely that the European Central Bank will choose to cut rates faster than the market is currently pricing in, so government bonds and higher-quality investment grade credit should outperform European high yield.

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On the US side of the coin, GDP forecasts appear too low vs. the incoming data, the US consumer remains very resilient in all but the very lowest segments, and the potential for fiscal stimulus, or a release of pent-up demand once we clear the uncertainty of the US election, favours lower-quality credit. Therefore, we expect outperformance of credit over rates and compression in US high yield to investment grade. We have been adding BB and B credit – subject to our bottom-up analysis on each company.

Al Cattermole, Fixed Income Portfolio Manager, Mirabaud Asset Management

 

IMPORTANT INFORMATION 
This marketing material contains or may incorporate by reference information concerning certain collective investment schemes (“funds”) which are only available for distribution in the registered countries.  It is for your exclusive use only and it is not intended for any person who is a citizen or resident of any jurisdiction where the publication, distribution or use of the information contained herein would be subject to any restrictions.  It may not be copied or transferred. 
This material is provided for information purposes only and shall not be construed as an offer or a recommendation to subscribe, retain or dispose of fund units or shares, investment products or strategies. Before investing in any fund or pursuing any investment strategy, potential investors should take into account all their characteristics or objectives as well as consult the relevant legal documents. Potential investors are recommended to seek prior professional financial, legal and tax advice. The sources of the information contained within are deemed reliable. However, the accuracy or completeness of the information cannot be guaranteed and some figures may only be estimates. In addition, any opinions expressed are subject to change without notice. There is no guarantee that objectives and targets will be met by the portfolio manager. 
All investment involves risks, returns may decrease or increase because of currency fluctuations and investors may lose the amount of their original investment. Past performance is not indicative or a guarantee of future returns. 
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Issued by: in the UK: Mirabaud Asset Management Limited which is authorised and regulated by the Financial Conduct Authority.  In Switzerland: Mirabaud Asset Management (Suisse) SA, 29, boulevard Georges-Favon, 1204 Geneva, as Swiss representative. Swiss paying agent: Mirabaud & Cie SA, 29, boulevard Georges-Favon, 1204 Geneva. In France: Mirabaud Asset Management (France) SAS., Spaces 54-56, avenue Hoche, 75008 Paris. In Luxembourg, Italy and Spain: Mirabaud Asset Management (Europe) SA, 6B, rue du Fort Niedergruenewald, 2226 Luxembourg. The Prospectus, the Articles of Association, the Key Information Document (KID) as well as the annual and semi-annual reports (as the case may be), of the funds may be obtained free of charge from the above-mentioned entities and on the webpage: https://www.mirabaud-am.com/en/funds-list/. Further information on sustainability is available at the following link: https://www.mirabaud-am.com/en/responsibly-sustainable.



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