Fixed Income




Customised solutions adapted to your needs

BNPP AM capabilities cover all types of fixed income strategies. Our teams are present in four management centres (Paris, Milan, New York and Tokyo). Totalling 55 investment professionals, they manage €140 billion of assets.


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Complementary fixed income expertise based on a common philosophy
• An optimised organisation, that is clear and efficient, based on the following investment processes:
            - Money market
            - Bonds
            - Fixed income total return
            - Quantitative management
• Transparency and strict respect of investment process guidelines
• Search for growth and performance drivers

 

Cross-functional skills to optimise performance

 

 

 

 

 

Strict risk control

    • Rigorous risk control as part of BNP Paribas group’s overall approach

    • Close supervision by the BNPP IP risk control department which ensures solid supervision of operating risks using appropriate procedures and specific tools

    • A dedicated Front Office Risk Monitoring team which participates in the Investment Committee

    • BNPP AM* has obtained SAS 70 certification, an international standard which evaluates internal transaction controls

    *In May 2008, BNPP AM obtained SAS 70 type II certification for its entities in France and in the United Kingdom



 

 

 

Credit research

    • Credit research lies at the heart of our issuer selection process

    • A dedicated team of 12 analysts split between Europe and the United States, specialised by geographic zone and market sector

    • Internal classifications which evaluate issuers on a scale from -3 to +3 (no zero rating) and which take into account market context as well as the likelihood of rating changes




Customised investment solutions
Within BNPP AM, the dedicated Fixed Income Solution Center team is responsible for developing specific investment strategies and solutions that draw on the many areas of expertise of our fixed income investment teams. We therefore offer customised solutions which meet the risk/reward requirements of our clients.



Four performance centers:

Liquidity and security:
money market

Money market investments are focused on assets with an investment horizon of less than one year. Maturities greater than two years are excluded altogether.

Our strengths:

• A leading player in the Euro zone with more than €66 billion under management: 17% growth in assets in 2008 thanks to net new deposits of €10 billion
• Low volatility and optimal security
• An ability to absorb substantial flows of funds and provide liquidity
• A robust investment process designed to generate value, while ensuring ongoing surveillance of credit risk
• Regular, competitive performance

 

Our solutions:
Solutions covering immediate liquidity funds, secondary liquidity funds and enhanced cash funds, enabling investments to be made:

• in various maturities and with a range of performance objectives (investment horizon from one day to three months, from three to six months or greater than six months)
• with various types of underlying assets: sovereign or credit (financials and industrials)
• in securities selected on the basis of an SRI (Sustainable and Responsible Investment) approach
• in four currencies (EUR, USD, GBP and CHF) and various geographic zones
• in funds rated triple A by Standard & Poor’s, Fitch Ratings and Moody’s

 



Diversification:
fixed income total return

These strategies are focused on funds and mandates designed to achieve an absolute performance with constraints.

• A search for performance by capitalising on all variations in macroeconomic indicators on financial markets
• Two specific yet complementary approaches:
            - one based on interest rates: a combination of fundamental/technical analysis and tactical trading
            - the other credit-based: through both beta and alpha strategies using a fundamental quantitative approach
• Risk management on a rigorously controlled ex-ante basis

Stability and relative performance:
bonds

Bond investments focus on funds and management mandates indexed to a benchmark where relative risk is measured by a tracking error. Insurance portfolio management is designed to comply with specific regulatory constraints that certain institutional investors must observe.

Our strengths:

• A European leader with more than €68 billion under management
• A team which reflects the increasingly defined segmentation of the market
• A robust investment process based on a fundamental macroeconomic approach combined with a careful selection of issuers and tactical strategies
• A rigorous approach to portfolio construction combined with a particular attention paid to the settings of ex-ante risks and their ongoing monitoring


Our solutions:
Flagship investment solutions offering a large spectrum of strategies, covering different maturities and market segments:

 

• Core range: Aggregate Euro, Sovereign Euro/Europe, Credit Euro/US/global
• Specific themes: inflation (Euro), Sustainable and Responsible Investment (Aggregate Euro and Corporate Euro), long floating rates notes
• Specific solutions: insurance portfolios, active-passive investment management

 




An alternative to fundamental investment management:
quantitative management

Quantitative investment focuses on three types of strategies:

• customised investment solutions that offer guaranteed capital and/or yield. Risk parameters are determined with investors
• fixed income solutions based on one or more quantitative models designed to generate alpha from currency, credit or fixed income
• structured products with modelling constraints. These solutions focus on avoiding default risk and actively managing investments to ensure that they retain the appropriate rating throughout the life of the product