Monthly Commentary – September 2021 EUR

by | Oct 8, 2021 | Analysis & Performance, EUR, News

During the month of September, spreads within our securities remained relatively stable to slightly weaker, despite concerns linked to tapering, higher interest rates, China’s Evergrande and higher energy prices. This low volatility once again demonstrates the strong technical demand for the securities held within our portfolio. With spreads of approximately 370 bps, the subordinated debt of financials remains an attractive asset class, especially considering the strong fundamentals in terms of credit quality. On top of that, subordinated debt has low sensitivity to interest rates, as demonstrated by the performance of German bunds, which moved up by 20 bps, as well as the year-to-date performance. 

As of 1 October, European banks do not have any restrictions linked to dividend payments. To our minds, this demonstrates the strength of European financials and the fact they have been extremely resilient during the global health crisis we have experienced. Non-performing loans are currently at low historical levels and capital is at the highest historical level with Common Equity Tier 1 (CET1) ratios close to 16%. As such, we have strong visibility regarding the income we are receiving from coupon payments. 

To conclude, we believe our strategy is well positioned for the current environment. As we have demonstrated in the past and indeed in 2021 to date, our strategy has low sensitivity to interest rates. Moreover, we are still generating high income, with good visibility due to the strong credit quality of financials. Finally, valuations remain attractive, and as such, we believe the fund should benefit from that going forward. 

  • The Valuation date: November 15, 2024
    serieAsOFDateFKFund NameISINMTDYTDSIMTDYTDSI
    120,241,115GAM Sustainable Climate Bond fundIE000BSJBO140.00860.0543-0.01980.865.43-1.98
    220,241,115GAM Star Crdt Ops EUR InvIE00B50JD3540.00720.11080.65520.7211.0865.52
    320,241,115GAM Star Crdt Ops GBP InvIE00B510J1730.00520.09330.92910.529.3392.91
    420,241,115GAM Star Crdt Ops USD InvIE00B57693100.00170.09280.84260.179.2884.26
    520,241,115GAM Interest Trend IncIE00BYM4P9130.00450.09410.37900.459.4137.90
  • 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.
    • AgreeCancel
    PERFORMANCE