Next-Finance : How ETF use has evolved at M comme Mutuelle ?
Christophe Cattoir : Even if I am a stock and a bond picker, I am now using trackers. Indeed, these products allow to boost our asset allocation, in particular through equity beta. In addition, in our equity fund of funds business, they give us access to markets for which I know few robust fund managers. This is the case in Asia (Japan in particular) and in emerging countries. Finally, we are also increasingly interested in the new generation of ETFs, offering smart beta or alternative strategies.
What is the place taken by ETFs in your allocation tools ?
For our equity fund - weighing 10% of our assets - the trackers represent approximately 25% of our allocation. Overall, ETFs therefore weigh 2.5% of our overall portfolio.
ETFs replicating the PNL of a short position on government bonds could be interesting for us…
Christophe Cattoir, head of asset management at M comme Mutuelle
Are you also using ETFs as hedging tools?
Yes indeed, even if at the moment, we have not effectively used them as hedging tools. Indeed, for example, ETFs replicating the PNL of a short position on government bonds could be interesting for us because I do not know any classic fund managers offering this type of strategy.
What are your criteria for selecting ETFs (fees? Liquidity? Index tracking? ...)?
First of all, we choose trackers with high quality of index replication. Secondly, we make sure to choose top ETF providers, such as Lyxor AM, Amundi or iShares, because these products carry a counterparty risk. Do not forget that some ETFs were closed during the financial crisis, in 2008.
Christophe Cattoir, head of asset management at M comme Mutuelle
Are there any asset classes on which there is still room for improvement?
Yes, in particular for bond ETFs. It would be interesting, for example, to find trackers replicating very specific strategies. I am thinking in particular of ETF tracking Bund/OAT spread or inflation, given the fact that it is currently possible to do it through swaps but for very significant amounts of money (around 50 million euros).
