DNCA Invest Credit Conviction
Flexible credit
Art.8
Key points
An active, flexible credit strategy designed to adapt to a changing market environment
- A medium-quality Investment Grade portfolio with room for manoeuvre in High Yield and the ability to seize international opportunities
- Active management of bond sensitivity within a [-2;+7] range
- Active management of credit risk through a wide range of bond strategies
Managers comments June 2025
NAV
€162.39
Risk indicator
Lower risk
Higher risk
Risks :
- Interest-rate risk
- Credit risk
- Risk of capital loss
- Convertible securities risk
- Perpetual bonds risk
- Risk related to exchange rate
- Liquidity risk
- Equity risk
- Distressed securities risk
- Risk of investing in Contingent Convertible Bonds and/or Exchangeable Bonds
- Specific risks associated with OTC derivative transactions
- Risk of investing in derivative instruments as well as instruments embedding derivatives
- ESG risk
- Sustainability risk
performance and volatility
as of 2025-08-07
Year-to-date performance
+3.69%
+8.40%
+6.21%
+6.21%
2.22%
Footnotes
*The inception date of the Fund is 2008-04-14
As for central banks, the ECB once again cut its three key rates by 25 basis points, in line with expectations. The deposit rate is now 2.00%. The Federal Reserve, meanwhile, is keeping rates in the 4.25% to 4.50% range, and is still forecasting two rate cuts in 2025.
On the economic front, manufacturing orders in April were up 0.6% on the previous month, above expectations (-1.5%), and in France, the harmonized consumer price index for June rose by 0.8% year-on-year, beating expectations by 0.7%. In the UK, the Prime Minister pledged that the country would devote 5% of GDP to defense, and the consumer price index came in at +3.4% year-on-year, exceeding expectations (+3.3%).
Against this backdrop, euro investment-grade credit gained +0.27%, while European high yield benefited from a compression effect, gaining 0.42%. Over the month, the fund generated a positive performance of 0.78%, outperforming its benchmark index (51). This performance was mainly due to an overexposure to UK interest rates, as well as to the outperformance of subordinates, notably additional tier 1s, and energy, helped by the movement in oil prices following tensions in the Middle East.
In terms of issuers, banks were in the spotlight, with Unicredit and Raiffeisen bank as top performers, while exposure to Worldline weighed on performance. Indeed, following the publication of press articles (relayed by the Mediapart and Le Soir media) on accusations of billions of euros in payments qualified as fraudulent, bonds fell sharply.
In terms of notable movements, we increased duration by buying UK 10-years and reducing shorts on the short end of the curve. Exposure to the high yield market was slightly reduced (sale of FNAC, Forvia, IRCA). On the non-euro exposure side, we continued to reduce our exposure to dollar-denominated credit (sale of HSBC, General Motors) for reasons of valuation after currency hedging. This position now represents only 1% of the strategy.
On the primary side, the market was prolific, and we were active in Total, Unicaja, Orlen (since sold), Heimstaden, Bankinter (AT1), Banco Cajama, Caixa Montepio...