Overview of the previous quarter and outlook for Q4 2020
The strategy’s performance continued to recover during the last quarter. The strategy’s relative and absolute performances are now positive. Strong results in the banking sector, in particular the lower part of the capital structure (i.e. T2 and AT1 bonds) were a strong driver of the rebound. But our focus on sectors benefitting from changing consumer behaviour, for example technology, also supported the performance. Furthermore, our overweight of Asian credit and BB-rated companies added value.
For the reminder of the year we will increase the portfolio liquidity by an enhanced use of CDS, reduce volatility by focusing on European Central Bank-eligible bonds and continue to favour bank, technology and media issuers. Given the strong central bank support, we expect the credit market to finish the year on a stable performance, despite multiple challenges ahead such as US political developments and the ongoing COVID-19 pandemic.
This material has been prepared solely for the purposes of Nikko AM to communicate about the market environment, etc. It is not solicitation for a specific fund. Moreover, the information in this material will not effect Nikko AM's fund investment in any way.
Mentions of individual stocks in these materials neither promise that the stocks will be incorporated nor constitute a recommendation to buy or sell. The information in these documents have been prepared from what is considered to be reliable information but the accuracy and integrity of the information is not guaranteed by the Company. Figures, charts, and other data in these materials are current as of the date of publication unless stated otherwise. In addition, opinions expressed in these materials are as of the date of publication unless stated otherwise.
* The graphs, figures, etc., contained in these materials contain either past or back-dated data, and make no promise of future investment returns, etc. These documents make no guarantee whatsoever of future changes to the market environment, etc.
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