We believe that long term interest rate trends are shaped by macroeconomic factors. However, in the short term, bond markets are subject to periods of higher volatility brought about by various non-fundamental factors such as fund flows.

We exploit these market inefficiencies by analysing fund flows to discern the behaviour of major market players. This in turn enables us to measure the short-term value of bond markets against all other markets.

The depth of the Euro-denominated bond market and the variety of investor it attracts create many opportunities for an alert manager. This is due in particular of the presence of traders and investors, who differ widely as to risk aversion and time horizon.

Our investment process is based on a top-down approach complemented by a bottom-up approach to sectors and issuers. We carry out detailed analyses of capital flows and of prevailing market consensus to detect market inefficiencies. We seek to determine interest rate movements and evaluate credit per rating and maturity segment over the coming three months. We do this in the framework of rolling one-year market forecasts carried out by our Research and Strategy team.

The European Fixed Income team has an average experience of more than 17 years. It comprises 10 portfolio managers, specialised by type of instrument, category of benchmark and geographic zone. Portfolio managers, drawing on the expertise of 7 credit and quantitative analysts, are responsible for detecting new profit generating trades while ensuring that investment management policies and risk monitoring of the funds and management mandates for which they are responsible are applied in a consistent way.