Pictet-EUR
Corporate Bonds Fund
For professional investors only
3
€1.5 bn
Highly
UNDER
MANAGEMENT 1
experienced
investment
managers
More than
1,300
bonds in
the investment
universe
Potential for higher yields
than cash or government bonds
360
c.
issuers
Pictet Asset Management
DIVERSIFICATION
across countries and
sectors beyond Europe
6
expert
credit
analysts
as at 28 June 2013
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Pictet-EUR
Corporate Bonds Fund
REASONS TO INVEST
Attractive asset class
Experienced investment team
This asset class has potential for delivering consistent
income and long-term capital growth. It is ideal for
investors seeking steady returns from an investment
less risky than high yield bonds or equities.
The three investment managers and the five expert
credit analysts are supported by two dedicated traders
and draw upon in-house expertise from a large team
of fixed income specialists. We also use external
research from rating agencies, issuer management
and sell-side analysts.
Broad range of opportunities
The Euro corporate bond market is highly diversified
across regions, industries and companies as well as
in credit quality, offering global exposure beyond
Europe. Many companies outside the Eurozone now
choose to issue bonds in euros, allowing investors
to benefit from a wide selection of euro securities.
Focus on quality
Unlike most of our competitors, we invest only in
investment grade bonds from robust companies: AAA
to BBB-*, with no high yield bonds. By avoiding lowerquality securities, we aim to reduce risk and volatility.
Robust and proven process
We follow a disciplined two-stage investment
process. This blends top-down evaluation of the
global environment with bottom-up sector and
individual issuer analysis. This process allows us
to better identify and deal with any inefficiencies
within the asset class.
* Standard & Poor’s ratings
WHY NOW?
Eurozone governments face mounting levels of debt, low prospects for growth and declining creditworthiness.
The threat of default means that Euro sovereign bonds are no longer the risk-free assets they once were.
In contrast, the Euro corporate bond market continues to expand, with more new issues of Euro bonds
than ever before. This sector offers a much wider range of issuers than Euro government bonds, and due
to the sovereign debt crisis, attractive yields mean investors are well compensated for any additional risk.
WHAT IS IT?
HOW CAN IT HELP YOU?
WHO IS IT FOR?
The fund aims to deliver steady
and sustainable capital growth by
investing in Euro-denominated
corporate bonds and other fixed and
floating rate securities. The fund
is actively managed enabling the
managers to quickly adapt to market
conditions and to identify the most
attractive opportunities from across
the universe of Euro-denominated
investment grade bonds.
Along with the potential for strong
and recurrent yields, investment
grade bonds tend to be less volatile
than either equities or high yield
bonds. The two components of the
performance of a corporate bond
(risk-free rate plus credit spread) tend
to move in opposite directions and
therefore can help to achieve stable
returns over the longer term. The fund
also offers valuable diversification
across regions and sectors.
This fund could be suitable for investors
who want to diversify away from
eurozone government bonds and who
are seeking another source of income,
without sacrificing the potential for
capital growth. The fund might also
appeal to investors who are looking
for a stable, long-term investment
in uncertain market conditions.
Pictet Asset Management
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In the current economic climate, investors are looking for sustainable
yields and reduced volatility. This is a great asset class for those
who would normally turn to government bonds for stability in their
portfolio – but with the added benefit of exposure to opportunities
across a range of sectors and countries.
FRÉDÉRIC SALMON
Senior Investment Manager
TYPICAL RATINGS BREAKDOWN OF THE INDEX*
By investing across a range of investment grade bonds, we aim to deliver strong yields at lower risk.
AA
A
BBB
48%
12%
40%
* Barclays Capital EUR Aggregate Corporate Index. Source: Pictet Asset Management / Barclays, typical ratings breakdown of the index
TYPICAL GEOGRAPHICAL BREAKDOWN OF THE INDEX*
WHAT ARE THE RISKS?
By investing across different regions, the fund offers exposure to an array
of companies and economies.
• Past performance is not a guide
SWEDEN
4.2%
UNITED KINGDOM
12.6%
NETHERLANDS
10.6%
• Investments in fixed income
GERMANY
13.4%
UNITED STATES
12.2%
FRANCE
20.3%
AUSTRALIA
2.8%
OTHERS
8.9%
* Barclays Capital EUR Aggregate Corporate Index
Source: Pictet Asset Management / Barclays, typical geographical breakdown of the index
Pictet-EUR Corporate Bonds Fund
instruments are subject to
default/credit risk of the issuers,
interest rate risk as bond prices
move inversely to changes in
interest rates and liquidity risk
when there is low liquidity in the
secondary bond market.
• The fund may engage in a variety
ITALY
8.8%
SPAIN
6.2%
to future performance. The value
and income of an investment
can fall as well as rise and you
may not get back the amount
originally invested.
of investment strategies in order
to mitigate its risk exposure and
enhance investment returns.
These strategies include the use
of derivatives instruments such
as futures, options and credit
default swaps. Such strategies
may be unsuccessful and incur
losses for the fund due to the
market conditions.
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HOW WE INVEST
INVESTMENT UNIVERSE
STAGE 1
c.1,300 bonds
360 issuers
and c. Our focus is on investment
grade corporate bonds
denominated in Euros.
We analyse bonds issued in
all the major financial centres
and do not limit ourselves
to European companies.
Global assessment
(Top down)
We consider the macroeconomic environment,
looking at growth, government
policies, interest rates and
commodity prices. This shapes
our thinking on the major
risks and opportunities.
STAGE 2
PORTFOLIO CONSTRUCTION
In stage 2 we aim to determine
the short and medium term
drivers of the market such
as valuation and technical or
fundamental factors in order
to define the investment theme.
The theme is implemented in
the portfolio from a medium
or short term perspective and
individual names are selected.
A rigorous control process
ensures that risk is actively
managed at both the
individual issuer and
portfolio level, with daily
monitoring of risk limits.
Our teams undertake a
detailed and objective analysis
of sectors and individual
issuers. From this, we develop
an understanding of the
most attractive companies
and securities.
(Bottom up)
Detailed analysis
KEY FUND FACTS
ABOUT PICTET ASSET MANAGEMENT
LAUNCH DATE
INVESTMENT TEAM
18/11/1999
Frédéric Salmon
Mathieu Magnin
BENCHMARK
Justine Vroman
Barclays Capital EUR
Aggregate Corporate Index
Pictet was founded in Geneva in 1805. Pictet is a partnership
of eight owner managers that encourages us to focus on the
group’s long-term success.
Pictet Asset Management (PAM) is the division responsible for
asset management for institutional investors and investment
funds. With over 650 employees, including 250 investment
professionals, we operate from 17 centres worldwide.
We offer a full range of active and quantitative investment
solutions including equity, fixed income and alternative
strategies for leading institutions globally.
Sub-fund of the Luxembourg-registered Pictet SICAV
Our clients include some of the world’s largest pension
funds, mutual funds, sovereign wealth funds and financial
institutions. We are dedicated to building lasting partnerships
with our clients by exceeding their expectations for
investment performance and service.
WANT TO FIND OUT MORE?
We manage USD 143 billion (CHF 136 billion / EUR 110
billion / GBP 95 billion) in assets as at the end of June 2013.
LEGAL STATUS
www.pictetfunds.com
www.pictet.com
Disclaimer
For professional investors only.
This marketing material is issued by Pictet Funds (Europe) S.A, an entity belonging to the Pictet Asset Management business line. It is neither directed to, nor intended for distribution or use by, any person or entity who is a citizen or
resident of or located in any locality, state, country or jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation. Only the latest version of the fund’s prospectus, regulations, annual and
semi-annual reports may be relied upon as the basis for investment decisions. These documents are available on www.pictetfunds.com or at Pictet Funds (Europe) S.A., 15, avenue J. F. Kennedy L-1855 Luxembourg. The information
and data presented in this document are not to be considered as an offer or solicitation to buy, sell or subscribe to any securities or financial instruments. Information, opinions and estimates contained in this document reflect a
judgment at the original date of publication and are subject to change without notice. Pictet Funds (Europe) S.A. has not taken any steps to ensure that the securities referred to in this document are suitable for any particular investor
and this document is not to be relied upon in substitution for the exercise of independent judgment. Tax treatment depends on the individual circumstances of each investor and may be subject to change in the future. Before making
any investment decision, investors are recommended to ascertain if this investment is suitable for them in light of their financial knowledge and experience, investment goals and financial situation, or to obtain specific advice from
an industry professional. The value and income of any of the securities or financial instruments mentioned in this document may fall as well as rise and, as a consequence, investors may receive back less than originally invested.
Risk factors are listed in the fund’s prospectus and are not intended to be reproduced in full in this document. Past performance is neither a guarantee nor a reliable indicator of future results. Performance data does not include the
commissions and fees charged at the time of subscribing for or redeeming shares. This marketing material is not intended to be a substitute for the fund’s full documentation or for any information which investors should obtain from their
financial intermediaries acting in relation to their investment in the fund or funds mentioned in this document.
© Copyright 2013 Pictet – Issued in September 2013
Pictet-EUR Corporate Bonds Fund
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