The third quarter was marked by renewed market volatility, as geopolitical tensions in the Middle East, persistent inflationary pressures and political uncertainty across Europe weighed on investor sentiment. Against this backdrop, markets increasingly priced in a higher-for-longer interest rate environment, driving money market and bond yields upward. Political developments also contributed to a widening of sovereign
Our strategy
Our decision not to hold any sovereign debt exposure shields the portfolio
from French sovereign risk, which has become a growing concern for
investors.
- Issuers took advantage of the temporary easing of geopolitical tensions in the Middle East to secure attractive funding conditions, resulting in sustained primary market activity throughout the summer.
- We continue to take advantage of current market volatility to invest at attractive yield levels. At the same time, we maintain a cautious approach to duration by keeping a significant allocation to floating-rate instruments and by hedging the portfolio when market conditions provide compelling entry points.
- We do not hold any sovereign debt exposure, which enables us to avoid French sovereign risk, an area that has become an increasing focus for market participants.