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Axel Botte

Fixed Income Strategist

Natixis Credit Opportunities: how total return strategies can make a difference?

13.06.2017 - Axel Botte

In today’s investment environment, characterized by low rates, and geopolitical uncertainties, where can fixed income investors turn for yield?

Traditionally, credit markets offer a competitive yield well above government bonds in line with their credit quality. Investors can capture yield from a diversified portfolio of credit securities –
corporate bonds, asset backed securities, and high yield bonds. However spread and yield compression following the CSPP and PSPP has even taken its toll on credit indices. The bright side is that the prolonged European central bank intervention and the good fundamentals credit opportunities remain. Moreover, market volatility due to geopolitical events like French elections or Brexit can be seen as positive for a total return portfolio. A return to volatility can mean a broader opportunity set.

Many skilled management teams run core or core plus portfolios, but there’s a clinch: sometimes, the biggest drag on performance can be “owning the benchmark” rather than the “top picks”. Increasingly, investors are finding that a broader opportunity set can be captured in credit markets if the manager is not tied to a traditional cap-weighted benchmark. Rather, given the flexibility to navigate across instruments, strategies and structures, a skilled manager can uncover sources of performance even in difficult market contexts.

 

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He began his career in 2000 at AXA Investment Managers as equity strategist producing both geographical and regional equity allocation recommendations.

In 2007, he was named Head of the Fixed Income research within the Investment Strategy department managing 2 fixed income strategists.
He joined Natixis Asset Management in October 2010 as Fixed Income Strategist. He provides top-down analysis of fixed income markets in close relationship with fund management teams. The research covers interest rates, developed market government bonds, sovereign debt allocation, global inflation-linked, credit and structured credit.

Axel Botte is a graduate of the University of Cergy-Pontoise. He holds a Advanced Studies Diploma (DEA) in Analysis of Financial and Industrial Strategies.