Risk analysis, a fundamental element

The understanding and integration of risk are at the centre of our investment process, present at each step: from the creation of ideas to their implementation in the portfolio. The asymmetrical profile of bond markets, and in particular of credit markets, requires close attention to the downside risk of issuers, markets and strategies. Our determination to develop a complete vision and understanding of risks has led us to adopt a disciplined and rigorous approach to the management of our portfolios.

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Philippe Noyard
Global Head of Credit & Deputy Global Head of Fixed Income
We implement conviction-based management in our investment choices. The key is not to take any risk that has not been thoroughly considered. The result of our risk approach is a zero default rate.

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A collaborative team

The credit team is made up of 20 complementary experts dedicated to these strategies. Our convictions are shaped through daily interactions between managers and analysts, at the heart of the credit team. They are discussed and strengthened during investment committee meetings. Moreover, we draw on the entire bond team at Candriam, made up of 40 experts, in order to obtain views of all bond markets in rates, emerging market debt and convertibles, while also having access to resources linked to macroeconomic research and the equity market.

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Our analysis at the service of performance

Our understanding of the credit market allows us to deploy our investment choices and adopt a flexible and opportunistic approach. We use liquidity filters and exclude controversial activities. We also carry out an in-depth fundamental analysis, integrating ESG factors and in particular governance to gain a better understanding of the solidity and solvency of issuers. As a result, none of our credit portfolios have defaulted since 1999.

Figures are worth a thousand words. 

 

€10bn

AuM

5

strategies

+1,000

issuers covered

+20

years of investment in the European High Yield segment

Flexible management guided by our convictions

Our portfolios result from a flexible approach that allows us to implement our convictions based on our market views, our understanding of risks and our fundamental and qualitative research. But also in order to maintain a credit risk adapted to the positioning of strategies. Therefore, our exposures are monitored continuously by a dedicated and independent risk team that ensures an evaluation and regular communication of risks of credit and liquidity events. 

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Innovations at the service of our customers

In 2017, we launched one of the first best-in-class 70% Global High Yield strategies. A fund labelled by Afnor and Febelfin, awarded the Prix Argent de l’innovation by Agefi. In 2021, we developed a market neutral credit strategy combining two performance drivers: a fundamental long/short to capitalise on market dispersion and a quantitative long/short to capture investment opportunities with low sensitivity to changes in sources of long-term financing, combined with a tactical overlay management[1]. Our innovative investment solutions are the fruit of our desire to best serve the needs of our clients in the face of changes in the market.

 

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A diversified offer in line with Candriam’s DNA: ESG

Three credit strategy solutions in relation to our ESG principles:

  1. SFDR 8 benchmarked management with ESG integration
  2. A long only SFDR 9 management with a best-in-universe exclusion filter
  3. An absolute performance management with ESG Integration

[1] Overlay management consists of adding a management step in the construction of a portfolio, in order to optimise its risk/return profile. This approach consists of either reducing the risk of the portfolio without excessively degrading performance, or, on the contrary, maximising return while maintaining control of associated risks.

FUNDS

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Main risks on Credit Strategies

  • Risk of loss of capital
  • Interest rate risk
  • Credit risk
  • High Yield risk
  • Currency risk
  • Liquidity risk
  • Derivative risk
  • Counterparty Risk
  • Arbitrage risk
  • Emerging market risk
  • Risk on Chinese debt through Bond Connect

Find out more

  • All our publications
  • Meet our experts
  • Candriam in the press

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