French boutique DNCA Investments, a boutique of Natixis Global Asset Management, has launched two new funds last December, a flexible inflation-linked bond fund, DNCA Invest Flex Inflation, on 13 December, and an absolute return bond fund, DNCA Invest Alpha Bonds on 14 December.
Both sub-funds of DNCA’s Luxembourg-domiciled Sicav are managed by Pascal Gilbert and François Collet, who both joined the firm’s absolute return bond team at the beginning of September 2017.
The DNCA Invest Flex Inflation fund aims to outperform the Bloomberg Barclays World Govt Inflation Linked Bonds Hedged EUR index over a recommended period of three years.
The fund will combine several sub-strategies including :
- a directional strategy aiming to optimise the performance of the portfolio based on interest rate and inflation expectations;
- an interest rate curve strategy aiming to exploit the variations of the spreads between long-term rates and short-term rates;
- an arbitrage strategy between, fixed-rate bonds and inflation-linked bonds to take advantage of the variations of the differential between the nominal rates and the real rates according to the anticipated growth and inflation outlook;
- an international strategy the aim of which is to take advantage of the opportunities offered by the OECD bond markets with an exposure to interest rates and inflation in these countries.
It will also implement a credit strategy founded on the use of private bonds.
The DNCA Invest Flex Inflation fund will permanently invest up to 100% of its total assets in floating-rate and/or nominal bonds and/or inflation-linked debt instruments. It will be constrained to the following limits: OCDE issuers (up to 100% of its total assets), public and semi-public sector (up to 100% of its total assets), private sector (up to 50% of its total assets).
The fund had €109m of assets under management as of 29 December 2017.
As for the DNCA Invest Alpha Bonds, it also blends multiple strategies, according to fund literature, such as a short/long directional strategy aiming to optimise the performance of the portfolio based on interest rate and inflation expectations; an interest rate curve strategy aiming to exploit spreads’ variations between long-term and short-term rates; an arbitrage strategy seeking the relative value on various bond asset classes and a credit strategy founded on the use of private debt.
It seeks to outperform the EONIA Index Plus 2.5% over a rolling three-year horizon. The fund had €143m of assets under management as of 29 December 2017.