Candriam Money Market solutions rely on a prudent active management of interest rate risk, a rigorous ESG analysis and credit selection, and on a strict and disciplined risk management.
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”Money market strategies are now a source of attractive carry and an opportunity for investors as the significantly higher nominal rates have transformed the risk-reward profile of the asset class. Investors are no longer forced to accept negative yields as the price for high liquidity and low volatility.
In our monthly committee we define our rate and credit exposure in function of the macroeconomic and monetary environment.
We can exploit a large investment universe comprising commercial paper, certificates of deposit, fixed- and floating rate note bonds across countries and denominations. br />However, all our portfolios are fully hedged and take no active foreign exchange risk. Lastly, we use interest rate derivatives to actively manage rate exposure.
Our approach and the large opportunity set allow us to seize opportunities in function of market conditions.
Our prudent and proven approach focused on maintaining a low volatility is key to navigate all types of market conditions.
For an issuer to be eligible for our portfolios, it must be analyzed internally in addition to being rated by S&P, Moody’s or Fitch.
The internal long-term credit recommendation is complemented by a money-market credit recommendation. It is specifically required for our money market solutions and is determined by the liquidity and cash flow generation profile of the issuer.
The credit analyst integrates ESG factors into his or her credit recommendation. Issuers involved in controversial activities (thermal coal, tobacco, controversial weapons) are excluded at an early stage.
The result is a diversified portfolio, with average ratings ranging from AAA to BBB+.
As per legal requirements, our portfolios are subject to strict liquidity rules imposed by ESMA.
We take a prudent approach and adhere to stricter credit risk and interest rate risk limits. Moreover, our internal diversification rules make for less concentrated portfolios and through their rating-driven nature tend to introduce a quality bias to the portfolios.
The portfolio constraints are checked daily by Candriam’s risk management department.
Lastly, stress tests are implemented on the interest rates and credit components with the aim to keep portfolio risks minimal.
Investors must be aware that the hedging of foreign exchange cannot be a total and permanent process and may not therefore fully neutralise the foreign exchange risk and so there may be differences in performance.
AuM in Money market strategies
Strategies : Money Market EUR, EUR AAA-rated, Sustainable EUR and Sustainable USD
Years experience in fixed income markets
Issuers in our portfolios, all analysed internally *
* Indicative data which may change overtime
We offer both article 8 and article 9 funds under the SFDR regulation.Our article 9 sustainable fund aims to have long-term positive impacts on key sustainability objectives relating to environmental and social domains.
We believe that our sustainable approach sends a powerful signal to companies and governments, for which liquidity is just as important as solvency. Money markets play a vital role in providing the liquidity for them to meet short-term obligations and manage their working capital.
One of our strengths is the size and expertise of our fixed income platform. We hold regular meetings with the other specialized teams to review macroeconomic conditions and forge convictions on rate & credit duration, and spread strategies. We discuss the credit and country recommendations during daily & weekly meetings. Sharing expertise and challenging ideas is a way to forge strong convictions.
We believe that our prudent investment philosophy and focus on volatility are key attributes for investors. Since inception the strategies have successfully navigated periods of heightened market stress (Lehman, Covid, geopolitical crises).
Our investment process combines a top-down approach to determine the interest rate and credit exposure, relying on proprietary frameworks, with a rigorous bottom-up government and corporate issuer selection based on an internal credit model
and integrating ESG factors. We notably focus on avoiding potential fallen angels at an early stage of the investment process.
The smooth and efficient implementation of this approach relies on the close collaboration of portfolio managers, credit/governmental analysts and fixed income quant analysts.
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This list of risks is not exhaustive. For further details on risks associated with investing in the promoted strategies, a general description and explanation of the various risk factors is available in the section Risk Factors of the relevant Prospectuses.