Groupama AM unveils unconstrained total return bond fund

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French asset manager Groupama AM has bolstered its unconstrained fund range with the launch of G Fund – Absolute Return Bonds, a multi-class fixed income absolute return strategy.

This follows the recent launch of two other unconstrained strategies : G Fund – Euro High Yield Bonds and G Fund – Global Breakeven Inflation.

The G Fund – Absolute Return Bonds fund seeks to outperform the capitalised EONIA by investing in bonds and money-market instruments and optimising their distribution to reach the investment target set.

To achieve this, the manager applies directional or arbitrage strategies with overall annualised volatility capped to 5% on the global fixed income, credit and foreign exchange markets. It is understood the team can initiate both buy and sell positions on this broad panel of instruments.

Three different types of management approach are used in the fund: directional, relative value and insurance managements.

Regarding its risk management approach, Groupama AM includes a global risk budget defined by performance driver and by the activation of stop-loss orders on each strategy in the event of unfavorable developments.

“G Fund Absolute Return Bonds meets the needs of investors who are increasingly seeking ‘all-terrain’ solutions that can adapt to a rapidly changing fixed-income environment. The challenge today is to generate returns even during phases of rising interest rates,” said Julien Moutier and Laurent Pommier, co-managers of the fund.

“The demand of our clients for fixed-income absolute return funds is reflected in the inflows of €500m in two years for our G Fund Alpha Fixed Income. With the launch of G Fund Absolute Return Bonds, we are capitalizing on the quality of our management teams to propose clients a new piece in the overall investment structure,” added Thierry Goudin, head of business development.

The fund, domiciled in Luxembourg, had €51.42m of assets under management as of 28 March 2018.