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Euro Opportunistic Bond

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Institutional Strategy > Fixed Income > Euro Opportunistic Bond

Euro Opportunistic Bond

A dynamic portfolio of our best ideas across Euro-denominated investment grade bonds.

  • Active euro-denominated, investment grade bond portfolio that seeks to outperform its benchmark1 over a market cycle (typically 3 years)
  • Flexibility to invest in the team’s high conviction ideas across countries by selecting attractive sovereigns, corporates and covered securities
  • Multiple alpha sources: duration, yield curve positioning, country, sector and issuer selection
  • Focus on liquidity of the underlying securities
  • Adaptive to changing market conditions through dynamic sector allocation
  • Managed by a team of experts with an average of 18 years’ experience, leveraging the resources of Neuberger Berman Fixed Income platform with over 170 investment professionals

Key Risks

Market Risk: The risk of a change in the value of a position as a result of underlying market factors, including among other things, the overall performance of companies and the market perception of the global economy.
Liquidity Risk: The risk that the portfolio may be unable to sell an investment readily at its fair market value. In extreme market conditions, this can affect the strategy’s ability to meet redemption requests upon demand.
Derivatives Risk: The portfolio is permitted to use certain types of financial derivative instruments (including certain complex instruments). This may increase the portfolio’s leverage significantly, which may cause large variations in the value of your share.
Credit Risk: The risk that bond issuers may fail to meet their interest repayments, or repay debt, resulting in temporary or permanent losses to the portfolio.
Interest Rate Risk: The risk of interest rate movements affecting the value of fixed-rate bonds.
Emerging Markets Risk: Emerging markets are likely to bear higher risk due to a possible lack of adequate financial, legal, social, political and economic structures, protection and stability as well as uncertain tax positions, which may lead to lower liquidity.
Counterparty Risk: The risk that a counterparty will not fulfil its payment obligation for a trade, contract or other transaction on the due date.
Operational Risk: The risk of direct or indirect loss resulting from inadequate or failed processes, people and systems, including those relating to the safekeeping of assets or from external events.
Currency Risk: Investors who subscribe in a currency other than the base currency of the portfolio are exposed to currency risk. Fluctuations in exchange rates may affect the return on investment. If the base currency of the portfolio is different from your local currency, then you should be aware that due to exchange rate fluctuations, the performance shown may increase or decrease if converted into your local currency.

Overview

Investment Philosophy

Three ideas guide us as we build our portfolios:

  • Fundamental analysis of the macroeconomic environment to identify long-term trends
  • Relative value approach that aims to identify investment opportunities
  • Efficient risk approach relevant to the Eurozone’s specific characteristics

Investment Process

We believe in an approach that combines top-down and bottom-up analysis to build actively managed portfolios with a focus on fundamental research and an efficient risk framework.

     

TACTICAL APPROACH

FORECASTS

  • Macro-economic analysis
  • 3M interest rate and credit forecasts

STRATEGIC ALLOCATION

  • Interest rate and credit risk budget
  • Integrating extreme market scenarios
  • Portfolio P/E < broader market

SELECTION OF ISSUERS

  • Debate/discussion with the analysts and choice of issuers
  • Euro buy/sell issuer list
  • Euro Model portfolios

BUILDING OF CLIENT PORTFOLIO

  • Selecting securities
  • Incorporating investment guidelines
  • Tactical management

Management

Patrick Barbe
Head of European Investment Grade Fixed Income
32 Years of industry experience
1 Year with Neuberger Berman