Invested in High Yield [1] rated credit bonds [2] whose issuers are domiciled in the OECD countries and with an average duration of less than two years, Natixis Short Term Global High Income Fund implements a non-benchmarked active management strategy aimed at delivering superior performance and portfolio diversification over a minimum recommended investment horizon of three years.
Sub-fund of the UCITS under Luxembourg law, Natixis International Funds (Lux) I [3], Natixis Short Term Global High Income Fund is aimed at all investors, both professional and nonprofessional.
Short Term High Yield bonds: an attractive asset class
Short term High Yield bonds are particularly attractive in the current environment:
Historically they have proven less sensitive to interest rate rises and will be less volatile
than the credit market as a whole [4];
They respond to the demand from clients subject to Solvency II, notably insurance
companies, who are seeking investments with a limited cost of capital;
Over the long term, they offer lower volatility than High Yield across all maturities.
An innovative active management strategy focused on bond selection
Natixis Short Term Global High Income Fund benefits from a non-benchmarked active management strategy without sector allocation combined with a 100% bottom up [5] approach. To deploy this strategy, the fund managers are supported by the expertise of the Natixis Asset Management credit research team comprising 17 analysts based in Paris, London and Des Moines (USA), headed by Sanda Molotcov, CFA. The research team focuses on identifying the issuers with the most robust fundamentals and offering the most compelling risk-reward. They pay particular attention to liquidity, solvency and the structure of the debt, together with the business models of the issuers. This bond selection process is thus at the heart of the fund’s alpha generation.
Optimum level of portfolio diversification
In addition to this bottom up [6] selection process, the co-fund managers Nolwenn Le Roux, CFA, and Vincent Marioni, SFAF, have established internal guidelines on the maximum number of holdings by sector and by issuer to ensure an optimum level of portfolio diversification. The portfolio of Natixis Short Term Global High Income Fund thus holds 90 international issues as of April 16, 2014.
