Monthly Commentary February

by | Feb 28, 2020 | News, Press & Articles

GAM Star Credit Opportunities (USD)

Despite a strong start to the month, the last week of February was marked by strong ‘risk-off’ sentiment activity due
to negative headlines on the Covid-19 coronavirus. The fund was not immune as reflected by a negative performance in the month. While we are monitoring the situation closely, we expect this to be credit neutral for the fund. Spreads on the USD-denominated subordinated debt of financials widened significantly during the month and we feel valuations are extremely attractive at the moment. The 10-year US rate fell significantly at the end of the month, following fears of the coronavirus. In this low interest rate environment, we feel the fund is well positioned by capturing spreads of more than 370 bps.

We are getting to the end of earnings season and we continue to observe strong operating performance and
what we regard rock-solid balance sheets. Overall, the tier 1 common capital (CET1) ratios of banks continue to increase, while non-performing
loans (NPLs) continue to decrease showing the strength of the financial sector and the results achieved by the multi-year regulatory process of capital strengthening. For insurers, we have also seen strong solvency ratios. For more details and specific examples please refer to the Spotlight section in this commentary.

The fund is well positioned to capture high and predictable income, in our view, and given the attractive valuation levels, we feel the fund has scope to benefitfrom further capital gains.

GAM Star Credit Opportunities (EUR)

Despite a strong start to the month, the last week of February was marked by strong ‘risk-off’ sentiment due to negative headlines on the Covid-19 coronavirus.The fund was not immune as reflected

by negative performance in the month. While we are monitoring the situation closely, we expect this exogenous event to be credit neutral for the fund. Spreads on the euro-denominated subordinated debt of financials widened significantly during the month. We feel valuations

are extremely attractive at the moment. The 10-year bund rate fell significantly
at the end of the month, following fears of the coronavirus. In this low interest rate environment, we feel the fund is well positioned by capturing spreads of more than 450 bps.

We are getting to the end of earnings season and we continue to observe strong operating performance and
what we regard as rock-solid balance sheets. Overall, the tier 1 common capital (CET1) ratios of banks continue to increase, while non-performing loans (NPLs) continue to decrease, showing the strength of the financial sector
overall and the results achieved by the multi-year regulatory process of capital strengthening. For insurers, we have also seen strong solvency ratios. For moredetails and specific examples please refer to the Spotlight section in this commentary

The fund is well positioned to capture high and predictable income, in our view, and given the attractive valuation levels, we feel the fund has scope to benefitfrom further capital gains.

GAM Star Credit Opportunities (GBP)

Despite a strong start to the month,
the last week of February was marked by a strong ‘risk-off’ sentiment due
to negative headlines on the Covid-19 coronavirus. The fund was not immune as reflected by a negative performance in the month. While we are monitoring the situation closely, we expect this to be credit neutral for the fund. Spreads on the GBP-denominated subordinated debt of financials widened significantly during the month and we feel valuations are extremely attractive at the moment. The 10-year Gilt rate fell significantly at the end of the month, following fears of the coronavirus. In this low interest rate environment, we feel the fund is well positioned by capturing spreads of more than 450 bps.

We are getting to the end of earnings season and we continue to observe strong operating performances and
what we regard as rock-solid balance sheets. Overall, the tier 1 common capital (CET1) ratios of banks continue to increase, while non-performing loans (NPLs) continue to decrease, showing the strength of the financial sector
overall and the results achieved by the multi-year regulatory process of capital strengthening. For insurers, we have also seen strong solvency ratios. For more details and few examples please refer to the Spotlight section in this commentary,

The fund is well positioned to capture high and predictable income, in our view, and given the attractive valuation levels, we feel the fund has scope to benefitfrom further capital gains.

  • The Valuation date: October 7, 2024
    serieAsOFDateFKFund NameISINMTDYTDSIMTDYTDSI
    120,241,002GAM Sustainable Climate Bond fundIE000BSJBO140.00130.0506-0.02320.135.06-2.32
    220,241,002GAM Star Crdt Ops EUR InvIE00B50JD3540.00100.10460.64600.1010.4664.60
    320,241,002GAM Star Crdt Ops GBP InvIE00B510J173-0.00010.08950.9224-522.538.9592.24
    420,241,002GAM Star Crdt Ops USD InvIE00B57693100.00060.09840.85200.069.8485.20
    520,241,002GAM Interest Trend IncIE00BYM4P9130.00030.09690.38260.039.6938.26

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