Ostrum Asset Management launches Ostrum SRI Crossover 2026, its new SRI credit maturity fund
02/09/2023PRESS RELEASES CSR / ESG
Ostrum Asset Management (Ostrum AM), an affiliate of Natixis Investment Managers, is launching Ostrum SRI Crossover 2026, an SRI1 credit mutual fund with a 4-year maturity, invested equally in Investment Grade and High Yield bonds, to take advantage of the renewed attractiveness of the credit market. Aimed at institutional investors, IFAs (Independent Asset Managers) and retail investors from the Banque Populaire and Caisse d'Epargne networks, Ostrum SRI Crossover 2026 is open for subscription until 25 May 2023.
Download press release
A unique universe combining high quality Investment Grade and High Yield credit
Ostrum SRI Crossover 2026 is a maturity fund with a unique crossover investment universe, combining Investment Grade and High Yield credit. In order to benefit from the renewed attractiveness of the credit market, which offers a potential yield of 4% on Investment Grade and 7% on High Yield, Ostrum SRI Crossover 2026 invests exclusively in bonds with a rating between BBB+ and B, and with a maturity up to 31 December 2026. The portfolio is concentrated on around 40 European issuers from various sectors with high growth potential: cyclicals, banks, real estate, etc.
Philippe Berthelot, Head of Credit and Money Markets at Ostrum AM, says: "As interest rates and volatility are expected to continue to weigh on the markets in 2023, we are launching the Ostrum SRI Crossover 2026 fund to offer our clients a product that is not sensitive to interest rates and that is able to seize opportunities in the credit market, while combining potential yield and sustainability.”
The expertise of a leader in HTM bond management in Europe
Ostrum AM is one of Europe's leading Hold to Maturity (HTM) bond managers2 with 4.1 billion assets under management and a wide range of 13 funds. It offers HTM solutions for all investors. HTM crossover bonds offer multiple advantages: visibility on the target yield3 from launch, a sensitivity to rates and volatility that decreases as final maturity approaches, and finally, a crossover universe that offers an attractive potential yield, while maintaining good credit quality. The active management of the fund also allows the optimisation of the risk envelope and the capture of potential new investment opportunities. Ostrum SRI Crossover 2026 is managed by Arnaud Colombel and Émilie Huot, a pair of managers with nearly 20 years of experience in credit, supported by one of the largest in-house credit research teams in Europe4.
A responsible investment approach
Classified as Article 85, the Ostrum SRI Crossover 2026 fund benefits from Ostrum AM's responsible approach, which is based on three principles: the integration of ESG6 criteria and extra-financial elements considered as "material"7 for each issuer; the engagement through an ongoing dialogue with issuers and the application of strict sectoral and exclusionary policies.
1. The fund does not have the French government's SRI label
2. Source Ostrum Asset Management - Figures as at 31/12/2022
3. Excluding default risk, reinvestment risk, issue non-call risk, residual currency risk and market risk. It is dependent on the level of spreads and liquidity conditions at the time of the launch of the appraisal and is therefore subject to change, both upwards and downwards, depending on the market environment. The allocation is itself subject to change for the same reasons.
4. Ostrum Asset Management's credit research team is composed of 23 credit analysts, including 2 specialised in sustainable bonds. The team covers the analysis of more than 1,200 issuers worldwide.
5. Article 8 according to the SFDR regulation. This Fund promotes environmental or social and governance (ESG) criteria but does not aim to be a sustainable investment. It may invest partially in assets with a sustainable objective, for example as defined by the EU classification.
6. ESG integration refers to the inclusion of ESG issues in investment analysis and decisions. The approach to ESG integration varies from fund to fund. ESG integration does not necessarily imply that investment vehicles also seek to generate a positive ESG impact.
7. Material: i.e. having an impact on the credit risk of the issuer
Ostrum SRI Crossover 2026 is a French mutual fund established in France, authorised by the French Financial Markets Authority. Natixis Investment Managers International is the management company by delegation of financial management to Ostrum AM.
The analysis and opinions mentioned in this document represent the point of view of the referenced author(s). They are issued on the date indicated, are subject to change and should not be construed as having any contractual value.
Risk profile of the fund:
Your money will be invested mainly in financial instruments selected by the management company. These instruments will be subject to market trends and fluctuations. The various risks may cause the net asset value of the Fund to fall.
Any investment involves risks, including the risk of loss. The Fund may be subject to other risks. Please refer to the full prospectus for a full list of risks. The Prospectus is available on the Fund Manager's website.
Risk of capital loss: The Fund does not benefit from any guarantee or protection. As a result, the capital initially invested may not be returned in full.
Discretionary management risk: The Fund's discretionary management style is based on the manager's anticipation of market trends. Consequently, there is a risk that the Fund may not be invested in the best performing instruments at all times.
Interest rate risk: This is the risk that interest rate instruments will fall as a result of changes in interest rates. It is measured by sensitivity. Sensitivity expresses the average degree of reaction of the prices of fixed-rate securities held in the portfolio when interest rates change by 1%. Interest rate risk is the risk of depreciation (loss of value) of interest rate instruments resulting from changes in interest rates which will lead to a decrease in net asset value.
Credit risk: This is the risk of deterioration in the financial and economic situation of the issuer of a debt security in which the Fund invests. In the event of a deterioration in the quality of an issuer, e.g. its rating by financial rating agencies, the value of the instruments it issues may fall. The realisation of this risk may result in a decrease in the net asset value of the Fund.
Counterparty risk: The Fund uses financial contracts, over-the-counter, and/or makes use of temporary purchases and sales of securities. These transactions, concluded with one or more counterparties, potentially expose the Fund to the risk of default by one of these counterparties, which may lead to a payment default that may result in a decrease in the net asset value.
Speculative securities risk: The portfolio may be exposed to speculative (high yield) or unrated credit securities. These securities present a higher risk of default and may experience more rapid price declines. The realisation of this risk may result in a decrease in the net asset value of the Fund.
Risk associated with the use of financial derivative instruments: The risk associated with the use of financial derivative instruments is the risk of magnifying losses through the use of forward financial instruments such as options, futures or over-the-counter financial contracts. As a result, the Fund may experience a faster and/or greater decline in net asset value than the decline in the underlying markets.
Risk associated with temporary acquisitions and sales of securities and the management of financial guarantees: Temporary acquisitions and sales of securities may create risks for the Fund, such as the counterparty risk defined above. The management of collateral is likely to create risks for the FCP such as liquidity risk (i.e. the risk that a security received as collateral is not sufficiently liquid and cannot be sold quickly in the event of default by the counterparty), and, where applicable, risks linked to the reuse of cash and securities collateral (i.e. mainly the risk that the financial collateral received by the FCP cannot be returned to the counterparty in the case of collateral received in securities, or cannot be used to repay the counterparty in the case of collateral received in cash).
Sustainability risk: This FCP is subject to sustainability risks as defined in Article 2(22) of the Regulation (EU) 2019/2088 on sustainability reporting in the financial services sector (the so-called "SFDR Regulation"), by an environmental, social or governance event or situation which, if it occurs, could have a material adverse effect, actual or potential, on the value of the investment. Environmental and/or Social and Governance criteria are integrated into the portfolio management process as mentioned above in order to take into account sustainability risks in investment decisions. The sustainability risk management policy is available on the management company's website.
Liquidity risk: The liquidity risk present in the Fund is due to the difficulty of immediately buying or selling high yield securities. The materialisation of this risk may have a negative impact on the net asset value of the Fund
Currency risk: None
About Ostrum Asset Management
Ostrum Asset Management draws on its investment expertise to enhance the impact of its clients’ commitments as they act together to support European citizens’ life plans, health and retirement.
A European institutional investment management leader1, Ostrum Asset Management supports its clients in their liability-driven investments, offering both asset management solutions on the back of its long-standing fixed-income and insurance-related management expertise (equity and fixed income), and investment services via its innovative technological platform.
Ostrum Asset Management is a well-established responsible investment advocate2 and manages €377 billion3 in assets for large institutional clients – insurers, pension funds, health insurers, corporations – as well as €515 billion3 in assets under administration for professional investors worldwide across all asset classes.
Ostrum Asset Management is an affiliate of Natixis Investment Managers.
Asset management company regulated by AMF under n° GP-18000014 – Limited company with a share of 50 938 997 €. Trade register 525 192 753 RCS Paris – VAT : FR 93 525 192 753. Reigstered office: 43, avenue Pierre Mendès-France – 75013 Paris – www.ostrum.com
1. IPE Top 500 Asset Managers (Investment & Pensions Europe) 2022 ranked Ostrum AM as the 11th largest asset manager, as at 12/31/2021. Any reference to a ranking, a rating or an award provides no guarantee for future performance.
2. Ostrum AM was one of the first French asset manager signatories to the PRI in 2008. More details; www.unpri.org
3. Source: Ostrum Asset Management, consolidated data at end-June 2022. Administered assets include Ostrum AM's assets. The services provided for a given client may concern certain services only.
About Natixis Investment Managers
Natixis Investment Managers’ multi-affiliate approach connects clients to the independent thinking and focused expertise of more than 20 active managers. Ranked among the world’s largest asset managers1 with more than $1 trillion assets under management2 (€1 trillion), Natixis Investment Managers delivers a diverse range of solutions across asset classes, styles, and vehicles, including innovative environmental, social, and governance (ESG) strategies and products dedicated to advancing sustainable finance. The firm partners with clients in order to understand their unique needs and provide insights and investment solutions tailored to their long-term goals.
Headquartered in Paris and Boston, Natixis Investment Managers is part of the Global Financial Services division of Groupe BPCE, the second-largest banking group in France through the Banque Populaire and Caisse d’Epargne retail networks. Natixis Investment Managers’ affiliated investment management firms include AEW; AlphaSimplex Group; DNCA Investments;3 Dorval Asset Management; Flexstone Partners; Gateway Investment Advisers; Harris Associates; Investors Mutual Limited; Loomis, Sayles & Company; Mirova; MV Credit; Naxicap Partners; Ossiam; Ostrum Asset Management; Seventure Partners; Thematics Asset Management; Vauban Infrastructure Partners; Vaughan Nelson Investment Management; and WCM Investment Management. Additionally, investment solutions are offered through Natixis Investment Managers Solutions and Natixis Advisors, LLC. Not all offerings are available in all jurisdictions. For additional information, please visit Natixis Investment Managers’ website at im.natixis.com | LinkedIn: linkedin.com/company/natixis-investment-managers.
Natixis Investment Managers’ distribution and service groups include Natixis Distribution, LLC, a limited purpose broker-dealer and the distributor of various U.S. registered investment companies for which advisory services are provided by affiliated firms of Natixis Investment Managers, Natixis Investment Managers S.A. (Luxembourg), Natixis Investment Managers International (France), and their affiliated distribution and service entities in Europe and Asia.
NATIXIS INVESTMENT MANAGERS INTERNATIONAL Legal form: société anonyme. Authorised by the Autorité des marchés financiers, hereinafter "the AMF", under number GP 90-009 - 43 avenue Pierre Mendès France - 75013 PARIS
1. Cerulli Quantitative Update: Global Markets 2022 ranked Natixis Investment Managers as the 18th largest asset manager in the world based on assets under management as of December 31, 2021.
2. Assets under management (“AUM”) of current affiliated entities measured as of September 30, 2022 are $1,072.9 billion (€1,095.4 billion). AUM, as reported, may include notional assets, assets serviced, gross assets, assets of minority-owned affiliated entities and other types of non-regulatory AUM managed or serviced by firms affiliated with Natixis Investment Managers.
3. A brand of DNCA Finance.