- Exposure to floating-rate notes that benefit from rising short-term rates
- Target: Libor + 100bp net of fees with maximum annualised volatility of 1.5% amid very low rates
- A historical annualised volatility rate of less than 1.0%
- An alternative to cash that limited its monthly drawdown to -1.1% in 2008 during the credit crisis
- Active management of maturity, rating and sector diversification
- Near-zero interest rate risk, moderate credit risk
- Experienced investment team with considerable expertise in credit
Cash is currently offering zero, or even negative rates. Against this backdrop, UBAM - Dynamic Euro Bond is offering an appealing yield-to-risk profile. The fund is positioned in stable names with a limited credit risk of less than 2.0 years and an average rating of BBB/A. In addition, it will benefit from rising short-term interest rates through its exposure to floating-rate notes.
UBAM - Dynamic Euro Bond aims to provide investors with consistent excess returns above money-market rates with nearzero interest-rate risk and moderate credit risk. It seeks to achieve euro three-month Libor +100 bp per year (net of fees) within a target maximum annualised volatility rate of 1.5%. The fund consists of a core portfolio that invests primarily in euro-denominated, shortduration floating-rate notes issued by a diverse range of financial and non-financial companies.