May 2018 Document only intended for professional investors as defined by MIFID.
Performance and risk analysis Base 100 Performances Fund's performance against its performance benchmark over 1 year 100,20 100,00 99,80 99,60 99,40 99,20 99,00 98,80 31/05/17 31/07/17 01/10/17 01/12/17 01/02/18 01/04/18 Net Cumulated performance Excess Return (basis points) 0,10 0,05 0,00-0,05-0,10-0,15-0,20-0,25-0,30-0,35-0,40 Cumulative Weekly Excess Returns over 1 year 31/05/17 31/07/17 01/10/17 01/12/17 01/02/18 01/04/18 Fund Details Total asset (EUR) 680 980 367.04 Net asset value (AC)(EUR) 331.89 (AD)(EUR) 99.92 Legal Form Mutual Fund regulated under French law Classification Bonds and other debt securities in Euro Investment horizon 1 year 100% Bloomberg Barclays Euro Aggregate 1-3 Dividend Policy (AC): Accumulation Shares (AD): Distribution Shares Start Date of Management 18/12/1992 Excess Return Indicators & ratios (weekly) Fund's volatility 's volatility Ex-post tracking error Information ratio Sharpe ratio Alpha Beta Net performance by calendar year 1 month 1 year 3 years 5 years 10 years 18/12/1992-0.46% -0.35% -0.11% -0.84% -0.46% -0.37% 1 year 0.41% 0.35% 0.13% -2.90-1.15 0.38 1.11-1.10% 0.29% -1.38% 3 years 0.46% 0.37% 0.16% -2.81-0.13 0.67 1.16 1.61% 3.42% -1.81% 5 years 0.53% 0.45% 0.18% -2.01 0.89 1.24 1.13 24.20% 26.76% -2.55% 10 years 1.22% 1.10% 0.52% -0.39 1.46 4.75 1.00 117.62% 165.40% -47.78% 18/12/1992 1.26% 1.28% 0.66% -0 0 0 0 2018 0 2017 0 2016 2015 2014 2013-0.64% -0.31% 0.07% -0.11% 2.02% 1.44% Excess Return -0.38% -0.26% Net monthly performance by calendar year -0.12% -0.19% 0.59% -0.53% 0.59% -0.70% 1.80% 0.22% -1.18 0.38 15.17 0.85 1.96% -0.51% 2018 2017 2016 2015 2014 2013 January -0.10% -0.23% 0.10% 0.14% 0.40% -0.13% February 0.01% 0.16% 0.03% 0.20% 0.16% 0.32% March -0.04% -0.17% 0.05% -0.04% 0.20% 0.09% April -0.05% 0.11% -0.04% -0.09% 0.21% 0.67% May -0.46% 0.01% 0.03% -0.10% 0.22% -0.10% June -0.15% 0.16% -0.32% 0.27% -0.44% July 0.17% 0.03% 0.14% 0.14% 0.35% August 0.02% -0.03% -0.13% 0.21% 0.01% September -0.08% -0.02% -0.10% 0.12% 0.23% October 0.13% -0.24% 0.22% -0.05% 0.40% November -0.10% -0.23% 0.13% 0.09% 0.14% December -0.18% 0.24% -0.15% 0.04% -0.09% The performance figures displayed in the document relate to the past and past performance should not be seen as an indication of future returns. The calculation of the alpha and beta ratios is made from gross data (and not net) because the application of fees will have the effect of modifying the results displayed in this document. Investment Objective The management objective is to outperform the benchmark, Bloomberg Barclays Euro A g g r e g a t e 1-3 y e a r s o v e r t h e recommended investment term. However, under certain exceptional circumstances and market conditions such as very low interest rate levels, and given that the fund invests exclusively in bonds issued by corporate or public issuers of the Eurozone whose the residual lifespan is mainly limited, the portfolio s yield may be lower than the total fees charged to the fund, either occasionally or on a structural basis. The Bloomberg Barclays Euro Aggregate 1-3 index is composed of fixed-rate bond securities issued in euros with a residual life between 1 year and 3 years, with a minimum rating of BBB- on the Standard & Poor's scale and Baa3 on the Moody's scale (investment grade). This index is calculated in euros with coupons reinvested by Barclays. Technical Data Total number of holdings 133 Average Life Yield to Maturity of the 2.30 year(s) 0.15% YTM (Fixed-imcome : 85.32%) 0.18% Weighted Average Coupon 1.31%
Analysis of the investment strategy Top 10 Holdings 1 2 3 4 5 6 7 8 9 10 FMS WERTMANAGEMENT 0.05% 06/07/2021 2.37% EIB 1.375% 15/09/2021 2.34% BTP 1.05% 01/12/2019 2.28% BONOS 0.75% 30/07/2021 2.26% BTP 0.7% 01/05/2020 2.20% BTP 0.65% 01/11/2020 2.18% EFSF 0.1% 19/01/2021 2.08% OAT 3.75% 25/04/2021 1.65% BTP 3.75% 01/03/2021 1.50% NEDERLAND 0% 15/01/2022 1.49% Total 20.37% Asset Type Fixed-rate Bond Adjustable-rate Bond Money Market Mutual Fund Cash, other Total except derivative products' off-balance-sheet commitment. Issuer Allocation Spread* 85.32% 13.76% 0 0 0.01% 0 0.91% 1 100.00% Sovereign -38.44% 28.96% Corporate 37.53% 70.13% Cash, other 0.91% 0.91% Total 100.00% Issuer Class Spread* Sovereign -36.40% 17.61% Sub-Sovereign -2.04% 11.34% Covered -10.87% 0.75% Structured Finance Products 0.47% 0.68% Corporate 47.93% 68.71% Cash, other 0.91% 0.91% Total 100.00% Industry Sectors Spread* Supranationals 0.48% 4.74% Sovereign -36.40% 17.61% Agencies 0.39% 6.60% Local governments -2.90% 0.00% Covered -10.87% 0.75% Structured Finance Products 0.47% 0.68% Finance 17.59% 26.67% Consumer 15.13% 19.19% Energy 1.46% 2.78% Real Estate 1.88% 2.45% Industry 2.46% 4.16% Utilities 3.18% 4.93% Technology 0.82% 1.10% Communication 3.49% 4.92% Transportation 1.91% 2.51% Cash, other 0.91% 0.91% Total 100.00% except derivative products' off-balance-sheet commitment. *in relation to the benchmark. Duration History duration as at 31/05/2018: 1.64 2,1 2,0 1,9 1,8 1,7 1,6 1,5 31/05/17 31/07/17 duration: 1.64 3 months : 0.01 1 year : 0.18 3 years : 1.53 5 years : -0.08 01/10/17 Duration: Exposure by Maturity 01/12/17 Derivative Products: Exposure by Country 01/02/18 01/04/18 Germany -4.87% Total -4.87% In percentage of the, derivative products' off-balance-sheet commitment included. Issuer Regional Allocation Spread* France -0.27% 21.86% Italy -0.45% 13.38% Netherlands 6.00% 12.87% Germany -8.93% 9.41% United States of America 6.39% 8.64% Spain -5.22% 5.28% Supranational 0.48% 4.74% United Kingdom 1.22% 4.24% Other -0.13% 18.67% Total 99.09% except derivative products' off-balance-sheet commitment & cash. *in relation to the benchmark. Ratings Spread* AAA -18.17 9.73% AA+ -4.72 0.31% AA -11.04 7.37% AA- -1.49 2.68% A+ 3.62 8.32% A 9.70 13.04% A- 8.02 11.47% BBB+ 8.14 21.27% BBB 5.47 21.38% BBB- 1.18 3.52% Total 99.09% except derivative products' off-balance-sheet commitment & cash. *in relation to the benchmark.
Issuer Regional Allocation* vs Issuer Class Total Sovereign Sub-Sovereign Corporate Covered Structured Finance Products Eurozone Repurchase agreement Cash, other Belgium 0.93% 0.00% 0.93% Eurozone 0.91% 0.91% Finland 0.74% 0.74% France 21.86% 1.66% 2.74% 17.46% 0.00% 0.00% Germany 4.54% 1.29% 3.86% 4.26% -4.87% Ireland 1.75% 1.07% 0.68% Italy 13.38% 9.54% 3.84% Luxembourg 1.05% 1.05% Netherlands 12.87% 1.49% 11.38% Portugal 0.49% 0.49% Spain 5.28% 3.63% 1.65% Total 63.80% 17.61% 6.60% 42.87% 0.00% 0.68% 0.00% -3.96% Australia 2.67% 2.67% Canada 2.26% 1.52% 0.75% China 0.00% 0.00% Denmark 1.74% 1.74% Japan 0.00% 0.00% Ex-Eurozone Mexico 0.46% 0.46% Norway 2.11% 2.11% Supranational 4.74% 4.74% Sweden 3.00% 3.00% Switzerland 1.46% 1.46% United Kingdom 4.24% 4.24% United States of America 8.65% 8.64% 0.00% 0.00% Total 31.33% 0.00% 4.74% 25.84% 0.75% 0.00% 0.00% 0.00% Total 95.13% 17.61% 11.34% 68.71% 0.75% 0.68% 0.00% -3.96% *derivative products' off-balance-sheet commitment included. The geographical allocation is calculated from the issuer's country of each issue. 0,00
Fund Manager Commentary Market Bond markets were shaken this month by political uncertainty in Italy and Spain as well as global trade concerns. In Italy, the populist Five Star Movement and League parties agreed to form a new coalition government, ending three months of political deadlock. In Spain, Prime Minister Mariano Rajoy finally lost a no-confidence vote and was ousted from office. He will be replaced by a leader of the opposition Socialist party, Pedro Sanchez. Uncertainties remain high regarding political programs in Italy and which measures could be considered as incompatible with EU rules, and investors suspicion should persist. Credit markets came under strong pressure and spreads quickly jumped wider. Financials were generally the main underperformers, as Italian banks led the widening, and the weakness spread to the other peripheral banks quickly. Credit Over the month, thanks to the flight-to-quality move, the widening spreads negative effect was partially compensated by the positive effect of dropping reference yields. The performance of the portfolio was negatively impacted by its overweight exposure on corporate bonds, and its underweight positioning on Eurozone core countries government bonds. The widening move was systemic and all issuers were hit, including those having no activity in peripheral countries. As often in such sharp moves, the liquidity became very low in the secondary market and short term bonds valuations dropped even if only a few transactions really occurred. The short maturity bonds universe remains almost dried up thanks to the ECB asset purchase program and prices should gradually come back to their previous levels when investors worries decline and come back in the markets. Allocation The primary activity market was very light and we only participated in the new 5-year floating rate note (FRN) from BNP. We maintained a close-to 13% portion of FRN in the portfolio. Duration Political uncertainty in Italy led to a widening of the BTP/Bonos spread to levels not seen since 2011. Italian 2-and-5-year maturity government yields rose by 120 and 150 basis points respectively, at 1% (+120bp) with a maximum at 2.75%, and 2.15% (+150bp; max. at 3%), while equivalent German yields decreased by 8 and 20bp. Despite the cautious positioning of the portfolio on Italy and Spain, the performance was negatively impacted as short maturity bonds tended to suffer much when the Italian yield curve flattened while moving higher. We however expect short maturity peripheral yields to decrease in the coming weeks when volatility decrease and investors chase for yield again. Outlook We expect Italy to remain the focus of the markets for a while, at least until there is clarity on the new government s policies and their approach towards the EU. But there are other issues as well including new government in Spain and importantly, the US decision to impose tariffs on steel and aluminium from the EU, Canada and Mexico. All three have announced they will retaliate and we may be at the start of a trade war, which will hardly help credit. In the meantime, it is very likely that the ECB will continue to communicate about the end of quantitative easing, and government yields should return to their rising trend. We expect the markets to keep a very close eye on the upcoming developments.
Important Information Bloomberg Barclays indices and associated data, Copyright 2018 Bloomberg Index Services Limited, Bloomberg Finance L.P., their affiliates and/or third party licensors («Licensors»). Used with permission. All rights reserved. Licensors make no warranties regarding use of or reliance upon such index data and shall have no liability in connection therewith. This document is produced and distributed by HSBC Global Asset Management (France) and is only intended for professional investors as defined by MIFID. The information contained herein is subject to change without notice. This document has no contractual value and in no way shall it constitute a solicitation or recommendation to buy or sell transferable securities in any jurisdiction in which any such offer is not authorised by the law. The commentary and analysis presented in this document reflect the opinion of HSBC Global Asset Management (France) on the markets, according to the information available to date. They do not constitute any kind of commitment from HSBC Global Asset Management (France). Consequently, HSBC Global Asset Management (France) will not be held responsible for any investment or disinvestment decision taken on the basis of the commentary and/or analysis in this document. The performance figures displayed in the document relate to the past and past performance should not be seen as an indication of future returns. All non-authorized reproduction or use of this commentary and analysis will be the responsibility of the user and will be likely to lead to legal proceedings. All data come from HSBC Global Asset Management (France) unless otherwise specified. Any third party information has been obtained from sources we believe to be reliable, but which we have not independently verified. HSBC Global Asset Management (France) - RCS n 421 345 489 (Nanterre). Management Company authorised by the French regulatory body AMF (n GP-99026). Postal address: 75419 Paris cedex 08 - France. Offices: Immeuble Coeur Défense - 110, esplanade du Général de Gaulle - La Défense 4 - France Any subscription to any fund described in this document must be made on the basis of the information notice currently in force, which is available upon request from HSBC Global Asset Management (France), the centralising agent or your usual financial service provider or representative or our Web site. www.assetmanagement.hsbc.com/fr. Document updated on 06/06/2018. Copyright 2018. HSBC Global Asset Management (France). All rights reserved. Fund Details Legal Form Mutual Fund regulated under French law Classification Bonds And Other Debt Securities In Euro Investment horizon 1 year 100% Bloomberg Barclays Euro Aggregate 1-3 Dividend Policy (AC): Accumulation Shares (AD): Distribution Shares Start Date of Management 18/12/1992 Base Currency EUR Valuation Daily Subscriptions & Redemptions Thousandths of shares Dealing / Payment Date Daily - D 12:00 / D+1 Initial Fee / Exit Fee 1.00% / Nil Minimum Initial Investment Thousandths of shares Management Company HSBC Global Asset Management (France) Custodian Caceis Bank Central Paying Agent Caceis Bank ISIN Code (AC): FR0000972473 (AD): FR0010503565 Bloomberg Ticker (AC): EXCOURT FP (AD): HSBCEBF FP Fees Real internal management fees 0.67% inc. taxes Maximum internal management fees 0.70% inc. taxes Maximum external management fees 0.20% inc. taxes