FIXED INCOME ASSET CLASS RETURNS TO BE APPEALING
To counter inflation, the Central Banks launched a policy of interest rate hikes in 2022 which has rekindled attention to bond investments. For the first time in many years, fixed income investments are once again having their value within a strategic asset allocation.
The context of high uncertainty and volatility makes the assessment and consequent choice of bonds to include in your 2023 portfolio crucial.
Never as in these situations is a flexible and dynamic approach essential.
KAIROS' OFFERING
KIS Bond Plus is a flexible absolute return bond Fund that aims to capture the best opportunities within the fixed income universe as a whole.
Depending on the changing market context with the aim of calibrating the risk/return ratio efficiently, the Fund invests mainly in Corporate and High Yield bonds from the European area, as well as in convertible bonds, financial subordinated and Emerging Markets, debt securities of any financial duration issued by governmental or non-governmental entities, that comply with ESG criteria.
The main objective of the management, characterized by a highly active style, is to maintain an efficient risk/return ratio with attention to the appreciation of capital in the medium term.
It is a very useful product for diversifying the bond portfolio as it has rather low levels of correlation with the main bond indexes and a duration that is always contained, i.e. that it does not have long positions: a low duration in fact makes it possible to optimize returns. Active duration management is on an opportunistic basis.
PORTFOLIO CONSTRUCTION
The investment universe of KIS Bond Plus is global, with a focus on European corporate and government issuers. The portfolio is built according to the principles of wide diversification and low concentration, using all the instruments of the bond market to adapt to different economic contexts, according to ESG logics. Kairos, in fact, focuses on a flexible product capable of promoting the principles of environmental, social and governance sustainability.
The investment process combines quantitative and qualitative approaches through macroeconomic and fundamental analysis.
The macroeconomic analysis, the starting point from the top-down approach, which looks at the economic cycle, interest rate trends, the geopolitical context and Central Banks, integrates with the fundamental bottom-up analysis of issuers and issues, focused on diversification and minimizing the correlation between existing positions.
The idea of the management team is to look for the best investment opportunities with:
The currency positions have the function of hedging the exchange rate risk. Sector selection and the choice of the most efficient segment of the issuer’s capital structure contribute to the generation of alpha.
The use of a large number of carefully selected and poorly correlated issuers and issues and flexibility in risk management represent an optimal combination to aim the objective of protecting capital in downturns without sacrificing returns.
According to the SFDR Regulation on ESG funds, the Fund is classified as art. 8. Further information on sustainability aspects is available at the link https://www.kairospartners.com/esg-en/?lang=en and in the prospectus.
The Fund is characterized by active management aimed at obtaining absolute performance, without any reference to a benchmark.
KIS Bond Plus is aimed at investors with an average risk tolerance with a medium risk tolerance who can set aside the capital for a period of at least three years and are prepared to meet defined investment objectives, have experience of, or understand, so-called “capital at risk” products and are able to accept capital losses (should these occur). The investment involves a risk component, consequently the capital originally invested may not be recovered in whole or in part. Past performance is no guarantee of future results. The summary risk indicator of KIS Bond Plus is rated at tier 2 out of 7. Full risk information is available in the Prospectus and the KID.
THE MANAGEMENT TEAM
The management of KIS Bond Plus is entrusted to Rocco Bove who boasts many years of experience in the entire area of the capital of issuers, with strong specialization in the categories of high-yield corporate bonds.
We are signatories of the PRI, Principles for Responsible Investment, the United Nations initiative which contributes to the development of an increasingly sustainable global financial system.
We are signatories of the Carbond Disclosure Project (CDP), the international non-profit organization that intends to contribute to the construction of a sustainable economy for people and the planet.