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FIXED INCOME

Absolute Return
Solutions

Flexibility is the key

In the current fixed income landscape yields are once again attractive but uncertainty is high. Investors are therefore looking for alternative investment solutions to traditional fixed income strategies that can take advantage of sharp market fluctuations. “Absolute Return” approaches aim to meet this objective.

With the flexibility to exploit opportunities across all segments of the fixed income universe, these solutions seek to achieve a positive annual performance in excess of money market rates.

This is a marketing communication intended for professional investors. Risk of capital loss. The objective is not a promise of return or performance.
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Absolute Return Solutions

A credit-driven asset allocation, flexible across all fixed income segments (financial and non-financial corporate debt, sovereign and inflation-linked bonds, senior and subordinated bonds, high yield and investment grade bonds).

Active, dynamic management of spread and modified duration.

Full use of tactical leeway to benefit from the wide range of investment opportunities offered by the fixed income markets.

Expertise drawing on the whole of Lazard Frères Gestion's fixed income research platform.

Product Story
Download

Documents

GIPS
Report
Download

Lazard Absolute Return
Credit Bonds

Risk of capital loss. The objective is not a promise of return or performance.
The investment process detailed in this section refers to the Lazard Absolute Return Credit Bonds GIPS Strategy – Representative Account. For more information on our ESG investment policy, please refer to this link: https://www.lazardfreresgestion.fr/EN/ESG-ISR/Notre-approche_147.html#section05.

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Main risks for investors

Risk of capital loss: There is no guarantee of the Strategy's performance or protection of capital. As such, the investor may not get back the full amount of the initial investment during redemption.

Interest rate risk: The risk of a decline in debt instruments as a result of changes in interest rates. This risk is measured by the level of sensitivity. For instance, bond prices tend to move in the opposite direction to interest rates. The net asset value may decline during periods when there is an increase (positive sensitivity) or decrease (negative sensitivity) in interest rates.

Credit risk: The risk of a deterioration in the credit quality of or default by a public or private issuer. The Strategy's exposure to issuers either through direct investment or via other UCI may give rise to a decline in the net asset value. If the Strategy is exposed to unrated or speculative/high yield debt, the credit risk is high and may lead to a decline in the Sub-fund’s net asset value.

Foreign exchange risk: The Strategy may invest in securities and other UCI that in turn are authorised to acquire instruments denominated in currencies other than the fund's base currency. The value of these instruments may fall if the exchange rates vary, which may lead to a decrease in the Sub-fund’s net asset value. Where units (or shares) denominated in a currency other than the fund's base currency have been hedged, the foreign exchange risk is residual as a result of systematic hedging, potentially leading to a performance gap between the different units (or shares).

Derivative financial instrument risk: The risk arising from the Strategy's use of forward financial instruments (derivatives), which may lead to a bigger decrease in the net asset value than on the markets or in the underlying assets in which the Sub-fund has invested.

Counterparty risk: This type with one or more counterparties potentially exposes the Strategy to a risk of insolvency of one or more of these counterparties, which could lead to default on payment and cause a decrease in the Strategy's net asset value.

Liquidity risk: The risk that a financial market cannot absorb transaction volumes due to trading volumes being too low or pressure on the markets. Such a situation may impact the pricing or timing when the Sub-fund liquidates, initiates or modifies positions and thus cause a decline in the Strategy's net asset value.

Risks linked to hybrid or subordinated securities: The Strategy may be exposed to hybrid or subordinated securities. Hybrid and subordinated debt are subject to specific risks of non-payment of coupons and capital loss in certain circumstances. For non-financial bonds, since hybrid debt securities are “deeply subordinated”, there is a low recovery rate in the event of issuer default.

Risk related to overexposure: The Strategy may use forward financial instruments (derivatives) to generate overexposure and thus bring the Strategy's exposure above its net asset value. Depending on the transactions, the impact of a decrease (purchase of exposure) or increase (sale of exposure) in the derivative’s underlying instrument may be amplified and thus amplify any decrease in the Strategy's net asset value.

Equity risk: Share price fluctuations may have a negative impact on the Strategy's net asset value. The Strategy's net asset value may decrease during periods in which the equity markets are falling.

Sustainability risk: Any environmental, social or governance event or situation that, if it occurs, could have an actual or potential negative impact on the value of the investment. Specifically, the negative effects of sustainability risks can affect issuers via a range of mechanisms, including: 1) lower revenues; 2) higher costs; 3) damage or impairment of asset value; 4) higher cost of capital; and 5) fines or regulatory risks. Due to the nature of sustainability risks and specific issues such as climate change, the likelihood of sustainability risks impacting returns on financial products is likely to increase in the longer term.

ESG investment risk and methodological limitations: Extra-financial criteria can be integrated into the investment process using data provided by external providers or directly reported by our analysts, notably in our proprietary ESG analysis grid. Data may be incomplete or inaccurate due to the lack of international standards or systematic verification by external third parties. It can be difficult to compare data because issuers do not necessarily publish the same indicators. The unavailability of data may also force management not to include an issuer in the portfolio. The management company may therefore exclude securities of certain issuers for extra-financial reasons, regardless of market opportunities.

A portfolio with at least 90% of Green Bonds issued by public entities, companies and financial institutions.

Flexible investment approach designed to benefit from opportunities offered by the various segments of the “green” bond universe: sovereign debt, investment grade and high yield.

Active, dynamic management of spread and modified duration.

Expertise leveraging the entire Lazard Frères Gestion's fixed income research platform.

Product Story
Download

Documents

GIPS
Report
Download

Lazard Absolute Return
Global Green Bonds

Risk of capital loss. The objective is not a promise of return or performance.
The investment process detailed in this section refers to the Lazard Absolute Return Credit Bonds GIPS Strategy – Representative Account. For more information on our ESG investment policy, please refer to this link: https://www.lazardfreresgestion.fr/EN/ESG-ISR/Notre-approche_147.html#section05.

< Back

Main risks for investors

Risk of capital loss: There is no guarantee of the Strategy's performance or protection of capital. As such, the investor may not get back the full amount of the initial investment during redemption.

Interest rate risk: The risk of a decline in debt instruments as a result of changes in interest rates. This risk is measured by the level of sensitivity. For instance, bond prices tend to move in the opposite direction to interest rates. The net asset value may decline during periods when there is an increase (positive sensitivity) or decrease (negative sensitivity) in interest rates.

Credit risk: The risk of a deterioration in the credit quality of or default by a public or private issuer. The Strategy's exposure to issuers either through direct investment or via other UCI may give rise to a decline in the net asset value. If the Strategy is exposed to unrated or speculative/high yield debt, the credit risk is high and may lead to a decline in the Sub-fund’s net asset value.

Foreign exchange risk: The Strategy may invest in securities and other UCI that in turn are authorised to acquire instruments denominated in currencies other than the fund's base currency. The value of these instruments may fall if the exchange rates vary, which may lead to a decrease in the Sub-fund’s net asset value. Where units (or shares) denominated in a currency other than the fund's base currency have been hedged, the foreign exchange risk is residual as a result of systematic hedging, potentially leading to a performance gap between the different units (or shares).

Derivative financial instrument risk: The risk arising from the Strategy's use of forward financial instruments (derivatives), which may lead to a bigger decrease in the net asset value than on the markets or in the underlying assets in which the Sub-fund has invested.

Counterparty risk: This type with one or more counterparties potentially exposes the Strategy to a risk of insolvency of one or more of these counterparties, which could lead to default on payment and cause a decrease in the Strategy's net asset value.

Liquidity risk: The risk that a financial market cannot absorb transaction volumes due to trading volumes being too low or pressure on the markets. Such a situation may impact the pricing or timing when the Sub-fund liquidates, initiates or modifies positions and thus cause a decline in the Strategy's net asset value.

Risks linked to hybrid or subordinated securities: The Strategy may be exposed to hybrid or subordinated securities. Hybrid and subordinated debt are subject to specific risks of non-payment of coupons and capital loss in certain circumstances. For non-financial bonds, since hybrid debt securities are “deeply subordinated”, there is a low recovery rate in the event of issuer default.

Risk related to overexposure: The Strategy may use forward financial instruments (derivatives) to generate overexposure and thus bring the Strategy's exposure above its net asset value. Depending on the transactions, the impact of a decrease (purchase of exposure) or increase (sale of exposure) in the derivative’s underlying instrument may be amplified and thus amplify any decrease in the Strategy's net asset value.

Equity risk: Share price fluctuations may have a negative impact on the Strategy's net asset value. The Strategy's net asset value may decrease during periods in which the equity markets are falling.

Sustainability risk: Any environmental, social or governance event or situation that, if it occurs, could have an actual or potential negative impact on the value of the investment. Specifically, the negative effects of sustainability risks can affect issuers via a range of mechanisms, including: 1) lower revenues; 2) higher costs; 3) damage or impairment of asset value; 4) higher cost of capital; and 5) fines or regulatory risks. Due to the nature of sustainability risks and specific issues such as climate change, the likelihood of sustainability risks impacting returns on financial products is likely to increase in the longer term.

ESG investment risk and methodological limitations: Extra-financial criteria can be integrated into the investment process using data provided by external providers or directly reported by our analysts, notably in our proprietary ESG analysis grid. Data may be incomplete or inaccurate due to the lack of international standards or systematic verification by external third parties. It can be difficult to compare data because issuers do not necessarily publish the same indicators. The unavailability of data may also force management not to include an issuer in the portfolio. The management company may therefore exclude securities of certain issuers for extra-financial reasons, regardless of market opportunities.

Global exposure focused exclusively on sovereign and quasi-sovereign debt (supranational debt, agencies, and inflation-linked bonds).

Asset allocation and the implementation of interest-rate strategies (curve positioning and country selection) as the main performance drivers.

Significant tactical leeway: emerging countries, high yield segment, currencies.

Rigorous risk monitoring embedded at the heart of portfolio construction.

Product Story
Download

Documents

GIPS
Report
Download

Lazard Absolute Return
Global Bonds

Risk of capital loss. The objective is not a promise of return or performance.
The investment process detailed in this section refers to the Lazard Absolute Return Credit Bonds GIPS Strategy – Representative Account. For more information on our ESG investment policy, please refer to this link: https://www.lazardfreresgestion.fr/EN/ESG-ISR/Notre-approche_147.html#section05.

< Back

Main risks for investors

Risk of capital loss: There is no guarantee of the Strategy's performance or protection of capital. As such, the investor may not get back the full amount of the initial investment during redemption.

Interest rate risk: The risk of a decline in debt instruments as a result of changes in interest rates. This risk is measured by the level of sensitivity. For instance, bond prices tend to move in the opposite direction to interest rates. The net asset value may decline during periods when there is an increase (positive sensitivity) or decrease (negative sensitivity) in interest rates.

Credit risk: The risk of a deterioration in the credit quality of or default by a public or private issuer. The Strategy's exposure to issuers either through direct investment or via other UCI may give rise to a decline in the net asset value. If the Strategy is exposed to unrated or speculative/high yield debt, the credit risk is high and may lead to a decline in the Sub-fund’s net asset value.

Foreign exchange risk: The Strategy may invest in securities and other UCI that in turn are authorised to acquire instruments denominated in currencies other than the fund's base currency. The value of these instruments may fall if the exchange rates vary, which may lead to a decrease in the Sub-fund’s net asset value. Where units (or shares) denominated in a currency other than the fund's base currency have been hedged, the foreign exchange risk is residual as a result of systematic hedging, potentially leading to a performance gap between the different units (or shares).

Derivative financial instrument risk: The risk arising from the Strategy's use of forward financial instruments (derivatives), which may lead to a bigger decrease in the net asset value than on the markets or in the underlying assets in which the Sub-fund has invested.

Counterparty risk: This type with one or more counterparties potentially exposes the Strategy to a risk of insolvency of one or more of these counterparties, which could lead to default on payment and cause a decrease in the Strategy's net asset value.

Liquidity risk: The risk that a financial market cannot absorb transaction volumes due to trading volumes being too low or pressure on the markets. Such a situation may impact the pricing or timing when the Sub-fund liquidates, initiates or modifies positions and thus cause a decline in the Strategy's net asset value.

Risks linked to hybrid or subordinated securities: The Strategy may be exposed to hybrid or subordinated securities. Hybrid and subordinated debt are subject to specific risks of non-payment of coupons and capital loss in certain circumstances. For non-financial bonds, since hybrid debt securities are “deeply subordinated”, there is a low recovery rate in the event of issuer default.

Risk related to overexposure: The Strategy may use forward financial instruments (derivatives) to generate overexposure and thus bring the Strategy's exposure above its net asset value. Depending on the transactions, the impact of a decrease (purchase of exposure) or increase (sale of exposure) in the derivative’s underlying instrument may be amplified and thus amplify any decrease in the Strategy's net asset value.

Equity risk: Share price fluctuations may have a negative impact on the Strategy's net asset value. The Strategy's net asset value may decrease during periods in which the equity markets are falling.

Sustainability risk: Any environmental, social or governance event or situation that, if it occurs, could have an actual or potential negative impact on the value of the investment. Specifically, the negative effects of sustainability risks can affect issuers via a range of mechanisms, including: 1) lower revenues; 2) higher costs; 3) damage or impairment of asset value; 4) higher cost of capital; and 5) fines or regulatory risks. Due to the nature of sustainability risks and specific issues such as climate change, the likelihood of sustainability risks impacting returns on financial products is likely to increase in the longer term.

ESG investment risk and methodological limitations: Extra-financial criteria can be integrated into the investment process using data provided by external providers or directly reported by our analysts, notably in our proprietary ESG analysis grid. Data may be incomplete or inaccurate due to the lack of international standards or systematic verification by external third parties. It can be difficult to compare data because issuers do not necessarily publish the same indicators. The unavailability of data may also force management not to include an issuer in the portfolio. The management company may therefore exclude securities of certain issuers for extra-financial reasons, regardless of market opportunities.

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Lazard Frères Gestion 25 rue de Courcelles, 75008 Paris

This document is provided by Lazard Asset Management LLC, Lazard Frères Gestion or its affiliates ("Lazard") for informational purposes only. Nothing herein constitutes investment advice or a recommendation relating to any security, commodity, derivative, investment management service or investment product. Investments in securities, derivatives and commodities involve risk, will fluctuate in price, and may result in losses. Certain assets held in Lazard’s investment portfolios, in particular alternative investment portfolios, can involve high degrees of risk and volatility when compared to other assets. Similarly, certain assets held in Lazard’s investment portfolios may trade in less liquid or efficient markets, which can affect investment performance. Past performance does not guarantee future results.

Any yield quoted is gross and is not guaranteed. It is subject to fees, taxation (particularly where presented gross of fees and taxes, which is specifically relevant for retail clients with Belgian residence) and charges within the portfolio and the investor will receive less than the gross yield. There can be no assurance that the portfolio's objectives or performance target will be achieved. Any views expressed herein are subject to change.
For more information on our ESG investment policy, please refer to this link: https://www.lazardfreresgestion.fr/EN/ESG-ISR/Notre-approche_147.html#section05.
The tax treatment of each client will vary, and you should seek professional tax advice.
For any complaints, please contact the representative of the LAM, or LFG office for your country. You will find the contact details below.
The contents of this document are confidential and should not be disclosed other than to the person or persons for whom it is intended.

This document is intended only for persons residing in jurisdictions where its distribution or availability is in compliance with local laws and Lazard's applicable regulatory approvals. Selling and taking possession of investments involves increased risk, and there is a possibility that the portfolio may not be able to recover the sums invested. The Lazard entities that have issued this document are listed below, along with important limitations on their authorized activities.

Australia: Issued by Lazard Asset Management Pacific Co., ABN 13 064 523 619, AFS License 238432, Level 12 Gateway, 1 Macquarie Place, Sydney NSW 2000, which is licensed by the Australian Securities and Investments Commission to carry on a financial services business. This document is intended for wholesale investors only.

Canada: Issued by Lazard Asset Management (Canada) Inc., 30 Rockefeller Plaza, New York, NY 10112 and 130 King Street West, Suite 1800, Toronto, Ontario M5X 1E3, a registered portfolio manager providing services to non-individual permitted clients.

Dubai: Issued and approved by Lazard Gulf Limited, Index Tower, Floor 10 Office 1008 DIFC, PO Box 506644, Dubai, United Arab Emirates. Registered in Dubai International Financial Centre 0467. Authorised and regulated by the Dubai Financial Services Authority to deal with Professional Clients only.

EU Member States: Issued by Lazard Asset Management (Deutschland) GmbH, Neue Mainzer Strasse 75, D-60311 Frankfurt am Main.

France: Issued by Lazard Frères Gestion, 25, rue de Courcelles, F-75008 Paris.

This document is intended only for persons residing in jurisdictions where its distribution or availability is in compliance with local laws and Lazard's applicable regulatory approvals. Selling and taking possession of investments involves increased risk, and there is a possibility that the portfolio may not be able to recover the sums invested.

Hong Kong: Issued by Lazard Asset Management (Hong Kong) Limited (AQZ743), Suite 1101, Level 11, Chater House, 8 Connaught Road Central, Central, Hong Kong. Lazard Asset Management (Hong Kong) Limited is a corporation licensed by the Hong Kong Securities and Futures Commission to conduct Type 1 (dealing in securities) and Type 4 (advising on securities) regulated activities only on behalf of “professional investors” as defined under the Hong Kong Securities and Futures Ordinance (Cap. 571 of the Laws of Hong Kong) and its subsidiary legislation.

Korea: Issued by Lazard Korea Investment Management Co., Ltd., 21F Seoul Finance Center, 136 Sejong-daero, Jung-gu, Seoul, 04520.

People’s Republic of China: Issued by Lazard Asset Management. Lazard Asset Management does not carry out business in the P.R.C and is not a licensed investment adviser with the China Securities Regulatory Commission or the China Banking Regulatory Commission. This document is for reference only and for intended recipients only. The information in this document does not constitute any specific investment advice on China capital markets or an offer of securities or investment, tax, legal or other advice or recommendation or, an offer to sell or an invitation to apply for any product or service of Lazard Asset Management.

Saudi Arabia: Issued and approved by Lazard Saudi Arabia, 15th Floor, Nakheel Tower, King Fahad Road, Nakheel District, Riyadh 12381, Saudi Arabia. Commercial Registration No: 1010297437 with a unified number: 7001642417, License of the Ministry of Investment No: 102031098747. Regulated and authorised by the Capital Market Authority (CMA).

Singapore: Issued by Lazard Asset Management (Singapore) Pte. Ltd., Unit 15-03 Republic Plaza, 9 Raffles Place, Singapore 048619. Company Registration Number 201135005W, which provides services only to “institutional investors” or “accredited investors” as defined under the Securities and Futures Act, Chapter 289 of Singapore.

Switzerland: Issued by Lazard Asset Management Schweiz AG, Uraniastrasse 12, CH-8001 Zurich.

United Kingdom: Issued or approved by Lazard Asset Management Limited, 20 Manchester Square, London, W1U 3PZ. Registered in England Number 525667. Authorised and regulated by the Financial Conduct Authority (FCA), providing services only to persons classified as eligible counterparties or professional clients under the rules of the FCA.

United States: Issued by Lazard Asset Management LLC, 30 Rockefeller Plaza, New York, NY 10112.