e-fundresearch.com: What is the current size of the fund?
Denis Girault: US dollar 255 million at the end of January 2014
e-fundresearch.com: Do you also manage other funds or mandates?
Denis Girault: Yes, I manage an investment grade EM corporate bond fund (UBAM FCP – EM Investment Grade Corporate Bond) with assets of USD 330 million since its launch in December 2011 and the UBAM – EM High Yield Short Duration Corporate Bond since its launch in February 2013 with assets of US dollar 100 million. I am also responsible for several EM corporate bond mandates.
e-fundresearch.com: What is the total amount of assets you manage currently?
Denis Girault: I manage US dollar 1.4 billion and the UBP EM Fixed Income team is responsible for US dollar 2.8 billion.
e-fundresearch.com: How long have you been in the business as a fund manager?
Denis Girault: I started at UBP in 2007 as fund manager for EM corporates. In total, I have worked in finance for more than 20 years.
e-fundresearch.com: What are the main steps in your investment process and in which area is your competitive edge to add value to investors?
Denis Girault: Our investment philosophy focuses on creating long-term value for our investors. In order to achieve that, we aim to identify investment opportunities across the entire investment cycle. Our investment decisions are based on rigorous in-house research using quantitative and qualitative analysis, and due diligence of all relevant risk factors. Our investment processes are highly transparent and put high emphasis on risk management at all stages of the investment decision and portfolio management.
Our investment process has the following main steps:
- Macro views & country score
- Fundamental corporate credit analysis
- Relative valuation analysis
- Portfolio construction and management
- Market trends
These steps constitute a rigorous and sequential process. The purpose of macro views and country score is to set maximum limits for each country. Fundamental corporate credit analysis and valuation, combined with relative valuation analysis, aims at selecting the best instruments for the portfolio and the appropriate positioning in terms of yield curve and peers (country and sector). Here we apply our proprietary financial models and our quantitative and qualitative analytical tools. Portfolio construction and risk management ensure that all internal rules and guidelines are being adhered to and that the fund managers comply with all legal regulations governing the fund. Market trends takes into account global factors affecting the fund with the aim to achieve the best risk-return combination for the portfolio.
e-fundresearch.com: Which benchmark is most relevant and how should investors compare the fund vs. benchmarks or peer groups?
Denis Girault: We use JP Morgan EM benchmarks for our funds and most of our mandates. They are the most widely used set of indices and provide a good indication of the “market”. For our corporate bond product we use the JP Morgan CEMBI Diversified index family. Investors should always ensure that they compare like-for-like when they look at peer groups. For example, it makes no sense to compare an EM investment grade with an EM high yield fund, yet we often find that funds with very different investment characteristics are grouped together for such “peer comparisons”.
e-fundresearch.com: Which performance did you achieve for the fund YTD and over the past five calendar years in absolute terms and relative to relevant benchmark or other reference indices?
Denis Girault: Since launch the fund returned annualized 6.40% net of fees (as at 14.02.2014). Our management style puts high emphasis on risk management (including liquidity risk) and capital preservation. As a consequence, the fund performed better than the benchmark in 2013, in particular during the height of “tapering turmoil” in May-August.
e-fundresearch.com: Thank you!