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MAPFRE AM presents the historic Global Bond Fund to institutional investors

Mar 30, 2023

Redacción Mapfre

Redacción Mapfre

MAPFRE AM recently presented the MAPFRE AM Global Bond Fund - a global fixed income fund managed by Amundi for over 30 years - to institutional investors at a presentation in Madrid. Chris Morris, the fund’s manager, together with Eduardo Ripollés, director of institutional business development at MAPFRE AM, and Cristina Carvalho, his counterpart at Amundi Iberia, explained the product's strategy and offered their perspectives on the macroeconomic environment and the banking sector.

The MAPFRE AM Global Bond Fund is a global fixed income fund that takes an active investment approach, seeking out opportunities in different international bond markets. It currently has EUR 223 million in assets under management.

The objective is to produce long-term returns by taking a diversified approach to investing in the sovereign and corporate segments, across both developed and emerging markets.

This strategy dates back to 1993, with the Capital Investment Spain International Fund, managed by Amundi exclusively for MAPFRE companies, and which in 2021 merged with MAPFRE AM Global Bond Fund.

"At MAPFRE we like to share ideas and create joint ventures like this," Ripollés explained during one of his speeches. "In fact, in the current environment, this kind of strategy makes perfect sense," he added, referencing the recent turmoil and uncertainty that have shaken the financial markets.

 

How can inflation be lowered?

Amundi’s Chris Morris believes that the only way to get inflation back to the central banks' target range is through a recession. "We’ve tried everything: waiting, raising interest rates quickly, we’ve gone through a couple of crises... And despite all that, price growth is still strong in the United States," he said, although he doesn’t believe that this situation will continue for much longer.

The fund manager anticipates a recession in the United States, and in Europe, though later on and with the impact softened somewhat due to the reopening of China after the pandemic. This could eventually bring inflation levels down, as it has done at other times.

While interest rate hikes have made fixed income attractive again, if they were to be cut, Morris suggests this would start from the 5% mark (in the case of the United States), and not 2%, so there is a lot of room for maneuver.

Credit conditions would suffer in the event of a recession, while Morris argues that, as far as emerging markets go, the focus should be on what the markets have ignored.

 

Confidence in the European banking sector

Morris was confident about the future of the European financial system in the wake of the collapse of Silicon Valley Bank (SVB) and the subsequent crisis at Credit Suisse, which was eventually bought by UBS, and highlighted the good results of European, U.S. and British banks in the stress tests.

Ripollés added that the panic situation that we’ve seen in the markets seems "artificial", given that it stems from fear over what happened with SVB.

Good prospects for the markets in the second half of the year

Good prospects for the markets in the second half of the year

The first half of 2024 was quite positive for equity markets, and forecasts for the next six months are equally bright. Which sectors have the most potential? What about fixed income? Alberto Matellán, chief economist at MAPFRE Inversión, goes into the details.

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