Unconstrained fixed income
An unconstrained strategy to capitalise on opportunities across the fixed income spectrum, as and when they arise.
Why invest in unconstrained fixed income?
Focus on returns
Traditional fixed income investing is often benchmark-oriented, with the aim to add value over a chosen index.
An unconstrained – or ‘go anywhere’ – approach provides the potential flexibility to capitalise on opportunities across the fixed income spectrum as and when they arise, with the goal of growing income and capital without reference to an index.
Holistic approach
Total return investing is a holistic approach that considers both income return and capital return, rather than focusing on an individual component. Income received by the portfolio can be reinvested back into the underlying assets with the aim of maximising total return.
Dynamic and diversified
Different parts of the fixed income universe have different performance and risk drivers correlated to different parts of the economic cycle. With the economic cycle in constant motion, a portfolio needs to be able to adapt. An unconstrained approach has the potential to balance the shifting risks and opportunities at different stages of the cycle.
Our unconstrained fixed income strategies
Our active, unconstrained approach to fixed income investing relies on flexible, dynamic asset allocation and diversification. We aim to capture different performance drivers at the right time, while managing the associated risks to deliver absolute returns.
Global absolute return bonds
Seeks to capture attractive risk-adjusted opportunities across global fixed income markets while smoothing the path of returns.
Learn more Explore fundGlobal strategic bonds
A core actively managed income-generating fixed
income allocation with diversified risk exposure, investing in global government bond, credit, high yield, emerging markets and securitised markets.
Important information
Marketing communication. For professional investors only.
Past performance or achievement is not indicative of current or future performance. Performance is calculated net of fees unless otherwise stated.
Any views expressed here are those of the author as of the date of publication, based on available information, and subject to change without notice. This material does not constitute investment advice.
Investments are subject to market fluctuations and the risks inherent in investments in securities. The value of investments and the income they generate may go down as well as up and it is possible that investors will not recover their initial investment. There is no guarantee that the performance objective will be achieved.
This document is directed only at person(s) who have professional experience in matters relating to investments (“relevant persons”). Any investment or investment activity to which this document relates is available only to and will be engaged in only with Professional Clients as defined in the rules of the Financial Conduct Authority. Any person who is not a relevant person should not act or rely on this document or any of its contents.
Fixed income sub-funds may be exposed to other risks defined below:
CAPITAL LOSS RISK: The value of the investments in Financial Instrument(s) and the returns generated by the described funds may go down as well as up. Investors may not get back the amount they originally invested.
INTEREST RATE RISK: The value of an investment may be affected by interest rate fluctuations. Interest rates may be influenced by several elements or events, such as monetary policy, the discount rate, inflation, etc.
CREDIT RISK: This is the risk that may derive from the rating downgrade of a bond issuer to which the sub-funds are exposed, which may therefore cause the value of the investments to go down. Sub-funds investing in high-yield bonds present a higher than average risk due to the greater fluctuation of their currency or the quality of the issuer.
COUNTERPARTY RISK: This risk relates to the quality or the default of the counterparty with which the Management Company negotiates, in particular involving payment for/delivery of financial instruments and the signing of agreements involving forward financial instruments. This risk is associated with the ability of the counterparty to fulfil its commitments (for example: payment, delivery and reimbursement). This risk also relates to efficient portfolio management techniques and instruments. If counterparty does not live up to its contractual obligations, it may affect investor returns.
MMFs ARE NOT GUARANTEED INVESTMENTS. An investment in MMFs is different from an investment in deposits, there is a risk that the principal invested in an MMF is capable of fluctuation. The MMF does not rely on external support for guaranteeing the liquidity of the MMF or stabilising the NAV per unit or share. The risk of loss of the principal is to be borne by the investor.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) INVESTMENT RISK: The lack of common or harmonized definitions and labels integrating ESG and sustainability criteria at EU level may result in different approaches by managers when setting ESG objectives. This also means that it may be difficult to compare strategies integrating ESG and sustainability criteria to the extent that the selection and weightings applied to select investments may be based on metrics that may share the same name but have different underlying meanings. In evaluating a security based on the ESG and sustainability criteria, the Investment Manager may also use data sources provided by external ESG research providers. Given the evolving nature of ESG, these data sources may for the time being be incomplete, inaccurate or unavailable. Applying responsible business conduct standards in the investment process may lead to the exclusion of securities of certain issuers. Consequently, the Sub-Fund’s performance may at times be better or worse than the performance of relatable funds that do not apply such standards.
This is not an exhaustive list of risks. For a full description of risks associated with each fund, please consult a client relationship manager or the global BNP Paribas Asset Management website: staging.bnpparibas-am.co.uk.