Macro Backdrop

September was a positive month for fixed income, as we saw the Federal Reserve cut interest rates by 50 basis points (bps) and the European Central Bank cut by 25 bps. As such, government bond rates continued to fall. Credit spreads initially widened during the month as sentiment was slightly weaker and we saw heavy supply within credit, but then risk appetite recovered as we witnessed the return of the ‘Fed put’. All of this meant that credit spreads ended the month at similar levels to the end of August. Fixed income markets in general and our funds benefitted from the lower interest rates. Interestingly, credit markets and risky assets in general remain totally unaffected by geopolitical tensions in the Middle East. Market technicals remain extremely strong.

Valuations and Fundamentals

Technicals on subordinated debt of financials were once again very positive. For instance, within Additional Tier 1 (AT1) Contingent Convertible bonds (CoCos), there were more than USD 14 billion of new issues during September which were met by a huge demand of more than USD 80 billion. USD 14 billion of new issues is the largest amount of AT1 primary we have seen in a month during the last few years. We did not participate in these new deals, since they came at relatively tight spreads. This also means that their backends (the reset spread of a bond on its first call date) are low compared to historical standards and therefore there is a bigger risk that these bonds will price more extension risk should markets fall, ie those bonds will fall more in an unsupportive market. Moreover, valuations are currently not taking this into consideration, in our view. As such, even though some of these new issues have and might be performing in the short term, we believe that we might find better entry points over longer periods of time. 

  • The Valuation date: December 2, 2024
    serieAsOFDateFKFundNameISINMTDMTDYTDYTDSISI
    120,241,202GAM Sustainable Climate Bond fundIE000BSJBO140.220.00220.06476.47-0.0102-1.02
    220,241,202GAM Star Crdt Ops EUR InvIE00B50JD3540.130.00130.116911.690.664266.42
    320,241,202GAM Star Crdt Ops GBP InvIE00B510J1730.080.00080.09839.830.937993.79
    420,241,202GAM Star Crdt Ops USD InvIE00B57693100.020.00020.09799.790.851285.12
    520,241,202GAM Interest Trend IncIE00BYM4P9130.060.00060.09629.620.381638.16

  • Please read this important legal information before proceeding.

    Information contained herein are solely for the use of the person who has accessed this information and may not be reproduced or distributed, even partially, to any other person or entity.

    The material contained herein is confidential and intended solely for the use of the persons or entities with nationality of or respectively with their residence, domicile, registered office or effective administration in a State or Country in which distribution, publication, making available or use of the information is not contrary to applicable laws or any other regulation.

    The material contained herein is aimed at sophisticated, professional, eligible, institutional and/or qualified investors/intermediaries who have the knowledge and financial sophistication to understand and bear the risks associated with the investments described.

    The information is solely product-related and does not take into account any personal circumstances and does not qualify as general or personal investment recommendation or advice. In particular, the information is given by way of information only and does not constitute a specific legal offer for the purchase or sale of financial instruments. Moreover, nothing contained herein is constitutive of any tax advice.

    Every effort has been made to ensure the accuracy of the financial information herein but the information contained herein has not been independently reviewed or verified. Therefore, Atlanticomnium SA gives no assurance, express or implied, as to whether such information is accurate, true or complete and no responsibility is accepted by Atlanticomnium SA for any errors or omissions. Third-party content is the property of its respective provider or its licensor and is protected by applicable copyright law.

    Past performance is not indicative of future performance. The price of shares/units and the income from the funds/trusts can go down as well as up and may be affected by changes in rates of exchange or financial markets fluctuation, out of the scope of Atlanticomnium SA.

    To the fullest extent permitted by law, in no event shall Atlanticomnium SA or our affiliates, or any of our directors, employees, contractors, service providers or agents have any liability whatsoever to any person for any direct or indirect loss, liability, cost, claim, expense or damage of any kind, whether in contract or in tort, including negligence, or otherwise, arising out of or related to the use of the information provided.

  • PERFORMANCE