First Eagle Amundi Income Builder Fund (continued): Please note that the fund is not managed through a top-down asset allocation approach. All investment decision are based on extensive fundamental in-house research seeking to identify an appropriate margin of safety to minimize the risk of permanent capital loss. The fund's asset breakdown is therefore a pure result of First Eagle's proven bottom-up security picking capacities.
While we will consider investments in securities offering a meaningful and sustainable income stream, investment decisions will always be driven by a material level of margin of safety. We are not hunting for yield at any price. On the contrary, we believe that the best way to generate a meaningful level of income and to protect purchasing power of capital over time starts first and foremost with avoiding the permanent impairment of capital.
e-fundresearch.com: In a nutshell: What investment philosophy and strategy does First Eagle pursue on the equity side?
First Eagle Amundi Income Builder Fund: First Eagle is a value house seeking to implement the teachings of Benjamin Graham and Warren Buffett in its core long term wealth management solutions. This investment philosophy can be described as "Making more by losing less". On the equity side, the investment team implements exactly the same unconstrained and rigorous margin of safety approach as practiced in First Eagle Amundi International Fund, combined with a dividend filter.
e-fundresearch.com: ...and on the credit side?
First Eagle Amundi Income Builder Fund: As for equity investments, credit investments are based on extensive fundamental research aiming to identify high yield bonds offering an appropriate margin of safety. This means that the investment team seeks to profoundly understand a companies cash flow and balance sheet structure in order to assess whether a company has the capacity and willingness to meet interest payments and to pay back its debt, even in a distressed environment. It also means to invest in corporate debt when a company has a sufficient equity cushion and enough easily liquidable assets in order to retrieve the invested nominal in the unfortunate event of a default. When such investments in high yield are more seldom, we will prefer to accept lower yielding investment grade and government bonds rather than chasing yield by going into low quality bonds and taking increasing risks of capital loss.
