Gharbi (La Française) ci parla di bond high yield
Intervista ad Akram Gharbi, Fund Manager di La Française Am
Which are the macro perspectives for this asset class around the world?
The High Yield asset class is supported by:
– A well oriented macroeconomic outlook, which should keep the default rate at a lower level in 2017. We expect the default rate to be between 3.5 to 4% for the next 12 months.
– The Central Banks’ accommodative policy in order to sustain economic recovery, in particular in Europe.
– Very strong technical factors with high inflows and moderate supply (new issues). The lower level of supply is due to weak M&A activity for High Yield companies and the lower level of new LBOs.
How would a rate hike in the Us affect this asset class?
Interest rates rise will have an impact on the fixed income asset class. However, the High Yield segment should be less affected than the Investment Grade segment thanks to a higher carry.
Furthermore, Fixed Maturity funds offer a lower exposure to interest rates over the life of the fund, so the rate increase should affect Fixed Maturity funds to a lesser extent than classic fixed income funds.
Do you invest just in corporate or also in government bonds?
We are mainly invested in corporate bonds but we can also invest in Emerging Government Bonds.
Investments on Emerging markets are only made through Hard currency issues, the currency risk is systematically hedged.
Which are the “top sectors” in your portfolio? Why?
The top sectors in our portfolios are:
– Non cyclical sectors: telecommunication, packaging, food industry. These sectors offer a higher visibility with strong Free Cash Flows and historically speaking, the default rate on these sectors are lower than others.
– Energy: default rates should decrease and the spreads are still attractive. We favour the US companies.
On the other hand, which are the sectors to avoid? And why?
In our judgment, the sectors to avoid are:
– Sectors exposed to regulatory risks. In particular Healthcare and Pharmaceutical industries in the United States.
– Cyclical sectors that suffer from high competition, in particular Retail
We think that those sectors should suffer from default rates rises.
Same questions relative to government bonds (if you invest in them, of course): Could you suggest some interesting issue?
In emerging markets, we favour countries exposed to oil and basic materials. Our top picks are Nigeria, Ghana, Ecuador, Angola
Which is the turnover of your portfolio?
27% in 2016