Global absolute return bond
Target steady returns with access to a wide range of bond opportunities.
The opportunity
Against a backdrop of elevated volatility and uncertainty, traditional fixed income approaches, such as those tethered to a specific benchmark or segment, may prove less effective. Absolute return strategies offer a sound alternative, we think. Unconstrained by a benchmark, they can invest across the bond markets with the best risk-reward ratios, helping to deliver smoother returns over a market cycle.
Strategy highlights
Broad fixed income universe
Drawing on their own expertise and the collective knowledge and ideas of our global fixed income platform, the investment team seeks to invest in the most compelling opportunities across the multi-sector fixed income universe including rates, developed market credit, structured credit, emerging markets, and foreign currency.
Portfolio
diversification
Collaborating with our sector specialists, the team leverages the breadth and depth of global fixed income markets to build a portfolio formed of multiple return streams. This can help to enhance diversification and deliver stable absolute positive returns that are less dependent on the overall direction of markets.
Capital preservation¹
The team’s process considers macroeconomic conditions, the relative value of individual securities, and overall risk. The result is a strong focus on capital preservation and generally low correlation to other fixed income assets, which can help the strategy to deliver smoother returns over a market cycle and help to improve the strategy’s overall risk-return profile.
Team and expertise
Our global absolute return bond strategy is actively managed by James McAlevey, Head of Global Aggregate and Absolute Return. Based in London, James has more than 26 years’ investment experience across multi-strategy fixed income and interest rates portfolios.² He is supported by three portfolio managers: Jayesh Mistry, Gaetan Fenerol and Heyuan Qian.
James and the Absolute Return team are part of BNP Paribas Asset Management’s Global Fixed Income investment group, which helps to ensure a global approach that considers all investment possibilities. To this end, they frequently collaborate with our other fixed income teams including, but not limited to, High Yield and Investment Grade Corporates, Emerging Markets, Structured Securities, Global Rates, and Money Markets. They also benefit from access to our dedicated Sustainability Centre, Quantitative Research Group and Macro Research team.
Investment Risks
Investments are subject to market fluctuations and other risks inherent to investing in securities. The value of investments and the income they generate may rise or fall and it is possible that investors may not recover their initial investment.
The strategy may be exposed to specific risks, including Collateral Management Risk, Counterparty Risk, Credit Risk, Derivatives Risk, Emerging Markets Risk, Extra-Financial Criteria Investment Risk, High Yield Bond Risk, Securitised Products Risk, and specific Risks related to Investment in Mainland China including Bond Connect.
For a complete description and definition of risks, please consult a client relationship manager.
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[1] BNP Paribas Asset Management doesn’t provide any formal capital guarantee or protection of the strategy. No information given or any term used herein shall be interpreted to provide such a guarantee or protection.
[2] BNP Paribas Asset Management, as of 30 September 2025.
Important information
Marketing communication. For professional investors only.
Past performance or achievement is not indicative of current or future performance. Performance is calculated net of fees unless otherwise stated.
Any views expressed here are those of the author as of the date of publication, based on available information, and subject to change without notice. This material does not constitute investment advice.
Investments are subject to market fluctuations and the risks inherent in investments in securities. The value of investments and the income they generate may go down as well as up and it is possible that investors will not recover their initial investment. There is no guarantee that the performance objective will be achieved.
Fixed income strategies may be exposed to other risks defined below:
CAPITAL LOSS RISK: The value of the investments in Financial Instrument(s) and the returns generated by the described funds may go down as well as up. Investors may not get back the amount they originally invested.
INTEREST RATE RISK: The value of an investment may be affected by interest rate fluctuations. Interest rates may be influenced by several elements or events, such as monetary policy, the discount rate, inflation, etc.
CREDIT RISK: This is the risk that may derive from the rating downgrade of a bond issuer to which the sub-funds are exposed, which may therefore cause the value of the investments to go down. Sub-funds investing in high-yield bonds present a higher than average risk due to the greater fluctuation of their currency or the quality of the issuer.
COUNTERPARTY RISK: This risk relates to the quality or the default of the counterparty with which the Management Company negotiates, in particular involving payment for/delivery of financial instruments and the signing of agreements involving forward financial instruments. This risk is associated with the ability of the counterparty to fulfil its commitments (for example: payment, delivery and reimbursement). This risk also relates to efficient portfolio management techniques and instruments. If counterparty does not live up to its contractual obligations, it may affect investor returns.
MMFs ARE NOT GUARANTEED INVESTMENTS. An investment in MMFs is different from an investment in deposits, there is a risk that the principal invested in an MMF is capable of fluctuation. The MMF does not rely on external support for guaranteeing the liquidity of the MMF or stabilising the NAV per unit or share. The risk of loss of the principal is to be borne by the investor.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) INVESTMENT RISK: The lack of common or harmonized definitions and labels integrating ESG and sustainability criteria at EU level may result in different approaches by managers when setting ESG objectives. This also means that it may be difficult to compare strategies integrating ESG and sustainability criteria to the extent that the selection and weightings applied to select investments may be based on metrics that may share the same name but have different underlying meanings. In evaluating a security based on the ESG and sustainability criteria, the Investment Manager may also use data sources provided by external ESG research providers. Given the evolving nature of ESG, these data sources may for the time being be incomplete, inaccurate or unavailable. Applying responsible business conduct standards in the investment process may lead to the exclusion of securities of certain issuers. Consequently, the Sub-Fund’s performance may at times be better or worse than the performance of relatable funds that do not apply such standards.
This is not an exhaustive list of risks. For a full description of risks associated with each fund, please consult a client relationship manager or the global BNP Paribas Asset Management website: www.bnpparibas-am.com.