Carmignac confirms exposure to Spanish and Italian bank bonds

French manager Carmignac Gestion has increased its corporate bond allocation, following parallel interventions by the European Central Bank and the Federal Reserve, which significantly reduced the supply of bonds on the US market.

“Feeling generally optimistic about corporate bonds, we have concentrated our purchases on the European financial sector, especially where discounted,” the firm said.

The manager is exposed to Spanish and Italian bank bonds maturing in less than three years, issued by robust institutions and for the most part in the form of top tier senior debt.

These investments account for nearly 6% of Carmignac Patrimoine’s assets.

The firm mentioned reservations about the sector and that acquisitions have been centred on maturities covered by the ECB’s intervention.

Meanwhile, the developed country government bond component has been stepped up from 11.6% to 14.7% of assets.

“Government bonds remained stable overall during the third quarter, despite the marked reduction in systemic risk. We took profits on German government bonds and introduced a more tactical management approach. In contrast, we are keeping 14% of our assets in US Treasury bonds,” Carmignac said.

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