Portfolio Managers Comment - June 2021 – Fixed Income – MAC AM CREDIT SELECT UCITS

Portfolio Managers Comment - June 2021 – Fixed Income – MAC AM CREDIT SELECT UCITS

 

Our Fixed Income management based on the primary market generated a performance of 1.21% in June, bringing the overall performance of the fund to 3.13 % since inception inception on January 04th, 2021).

 

 

In the US, rates fell to 1.446 from 1.59 in May for the 10Y. We observed the same trend in the UK for the 10Y with 0.913 in May and a decrease to 0.835. However, in continental Europe things have been more stable with the French 10-year which stood at 0.131 and the German 10-year rate at negative 0.248.

In Europe, the figures for May (released in June) were broadly good with a PMI at 63.1 and prices rising 2%. In the United States, however, the rise in consumer prices (CPI) increased by 5% and inflation stood at 6.6% over one year, a sign of high inflation, although considered temporary by central bankers.

What particularly caught the attention of investors in June was undoubtedly the decision of the US Federal Reserve to hike its rates as early as 2023 and to reduce its asset buybacks in the more or less near future. This famous “Tapering” remains at the heart of the attention on the markets, while the Fed Funds remain at 0.25%. After his hearing before Congress Jay Powell explained that he was considering two rate hikes in 2023. In Europe, the ECB insisted that it would increase its repurchases via the PEPP in the coming months and should hold until in March 2022.

Despite the progress of vaccination campaigns, a sharp increase in cases is currently recorded in the United Kingdom as well as in some countries around the world. This resurgence in the face of the famous Delta variant in particular seems to imply a slowing down or delay in the lifting of restrictions.

After a month of May punctuated by a depreciation of the dollar against the euro, the opposite trend happened during the month of June with the dollar appreciating against the euro to reach 1.18585.

It was in this somewhat disparate month of June in terms of announcements, figures and market developments that we adopted more flexible management. To do so, we kept certain positions due to their attractive coupons as well as their high valuation and the inclusion of new securities with longer durations. This allowed us to maintain low volatility at 1.61% and deliver a performance of 1.21%.

Benefit from this strategy

To benefit from this strategy in your investments, you can freely subscribe to our UCITS1 Fund started on January 04, 2021.

A UCITS Fund like ours offers a strict regulatory framework in terms of transparency as well as protection of capital and clients. The strategy analyzes the economic environment as a whole, identifies and adjudicates market opportunities on primary and secondary market with the aim of generating absolute performance uncorrelated from the markets.

EUR Share Class : LU2095273590

USD Share Class : LU2131342482

For more information, do not hesitate to visit the dedicated page or to contact us directly.

P: +44 (0)20 3750 9971

M: info@mac-am.co.uk

  1. Investment vehicle regulated for the purpose of investor protection, liquidity and transparency.

 

 

 

Image : https://unsplash.com/photos/6b3r1WAjPBI - Sander Crombach