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Signia's Gregoire Sharma, Fixed Income Fund Analyst, discusses his 'favourite fund' in Citywire

Grégoire Sharma

Published 24/09/2021

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Signia's Gregoire Sharma, Fixed Income Fund Analyst, discusses his 'favourite fund' in Citywire

Fund Manager Data News Analysis by Citywire

MY FAVOURTIE FUND: NINE WEALTH MANAGERS' TOP PICKS

Published 24 September 2021, by Ross Miller

 

"This week, we asked Citywire Wealth Manager readers for their current favourite fund pick - and there were some varied responses.  Some wealth managers are optimistic about the UK's economic recovery, while others are focused around the world.  Sustainable funds remain popular too."

 

Gregoire Sharma
Fixed income fund analyst, Signia

The BlueBay Financial Capital Bond fund invests in capital securities with a strong structural bias towards European subordinated bank debt, namely of best-in-class national 'champion banks'.  The strategy's impressive track record can be attributed to the experience and stability of the team, which implements a robust investment process that frames credit selection with top-down macroeconomic analysis.

Lead manager Marc Stacey and co-manager James MacDonald have done an impressive job at generating strong risk-adjusted returns versus peers as well as Euro high yield and Global high yield indices, with total returns predominantly driven by good credit selection.

At1s are currently the fund managers' highest conviction given these securities are still underowned by major indices and subsequently many investors.  The strategy performance is currently benefiting from significant policy support from central banks and robust sector fundamentals given the solid and resilient bank capital base.

Furthermore, on a valuation basis, European bank AT1 trades at a decent spread to similarly rated European high yield credit offering good relative carry opportunity in the current yield-starved environment.

Finally, there is an upside risk to rates, which positive for the asset class given the boost to bank profitability from steepening yield curves.

 

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