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Alert: DNCA Finance identity theft. DNCA Finance, an affiliate of Natixis Investment Managers, draws the public's attention to the impersonation of DNCA Finance by various individuals or companies based abroad, including a company presenting itself as a financial services company called "Influx Finance". These individuals and companies fraudulently refer to the name of DNCA Finance or DNCA Investments in their dealings with individuals to recommend investments of various kinds (bitcoin, gold, shares, etc.).
DNCA Invest Credit Conviction
Flexible credit
Art.8
In June, tensions in the Middle East escalated considerably as a result of Israeli attacks on Iranian infrastructure, provoking retaliation from Iran and an escalation of the conflict. This raised concerns about disruptions to energy supplies, leading to a logical rise in oil prices. However, American intervention brought a swift end to the conflict, which was renamed the "12-Day War". The latter had only a moderate impact on credit spreads, still helped by very strong technical factors.
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...
Footnotes

*The inception date of the Fund is 2008-04-14