Plenisfer Destination Dynamic Income Total Return - The "new active" approach to flexible global bonds

In Short

Mauro Ratto, Co-Founder and Co-Chief Investment Officer at Plenisfer Investments, explains how making a strong call on inflation has led to positive returns in the first year of the Plenisfer Destination Dynamic Income Total Return.
"...our core strategy emphasizes income, with a focus on rotating sectors to capitalize on the best opportunities, ensuring stable and sustained carry"
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by Mauro Ratto

Co-founder, Co-CIO and Lead Portfolio Manager at Plenisfer, part of Generali Investments

Milestone

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The 1-YEAR ANNIVERSARY of the new Plenisfer Destination Dynamic Income fund

The 'NEW ACTIVE' approach to flexible global bonds

With the Plenisfer Destination Dynamic Income Total Return fund reaching its one year anniversary in May, Mauro Ratto explains how making a strong call on inflation has led to positive returns.

  • The Plenisfer Destination Dynamic Income Total Return focuses solely on total return, covering sovereign and corporate bonds from across the global fixed universe.

  • From the outset, our portfolio has reflected the shift in trends. We identified inflation as a persistent threat, shaping our strategy to maintain relatively short to medium-term duration while seeking opportunities in credit spreads.

  • We believe global fixed income markets present plentiful opportunities for an unconstrained, multi-strategy approach, offering higher returns with lower volatility, particularly in the context of subdued equity yields.

The ‘new active’ approach1

The Plenisfer Destination Dynamic Income Total Return (the “Dynamic Income fund”) is part of a range of funds that that all share the same multi-strategy approach that defines our investment philosophy. In essence, we believe that investing has fundamentally shifted into a new environment, which calls for an entirely different investment approach to deliver returns. In contrast to the previous twenty years, investors now face higher inflation, tightening liquidity, and a shortage of labour and materials.

That is why we do not allocate by asset class in any of our funds, but through complementary strategies that are entirely unconstrained, allowing us to access opportunities outside of benchmarked products. In the Plenisfer Dynamic Income fund, our core strategy emphasizes income, with a focus on rotating sectors to capitalize on the best opportunities, ensuring stable and sustained carry. Complementing this are special situations, where we select idiosyncratic bond opportunities, including distressed debt and sovereigns, to enhance returns. We also implement a macro strategy, allocating to long and short positions on rates and currencies, and utilizing derivatives for relative bets.

We call this multi-strategy approach ‘the new active’. It aims to optimise the convexity of the portfolio compared to market betas while mitigating volatility, by finding idiosyncratic opportunities with the potential to deliver specific performance outcomes.2 Our unconstrained, goal-based approach aims to avoid the overcrowding and overconcentration of risk that we believe is all too common in the asset management industry.

Outlook: Combining spread and duration exposure

We're monitoring US unemployment numbers, and while we don't foresee a recession, we anticipate slower growth. Therefore, our positioning has been conservative compared to competitors, using TIPS to add duration to the portfolio without generating negative carry.

While economic conditions in Europe and the UK differ, we anticipate a convergence towards previous inflation levels. Consequently, our investment approach capitalizes on opportunities in  sovereign and credit spreads.

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1 There is no guarantee that an investment objective will be achieved or that capital will be preserved. The Fund does not benefit from any capital protection guarantee.

2 This Fund is not a guaranteed product. Investments involve risks. You may not recover the initial investment. You may lose part or all of the initial investment. Investment can result in financial loss, as there is no capital guarantee.

Important Information

This marketing communication relates to Plenisfer Investments SICAV, a société d’investissement à capital variable (SICAV) under Luxembourg law of 17 December 2010, qualified as an investment company in securities (UCITS), and its Compartment, “Destination Dynamic Income Total Return Fund,” collectively referred to as “the Fund.” This marketing communication is intended for investors in Italy, France, Austria, Germany, Spain, Portugal and Luxembourg, where the Fund is registered, and is not intended for U.S. persons as defined in Regulation S under the United States Securities Act of 1933, as amended.
This document is co-issued by Generali Asset Management S.p.A. Società di gestione del risparmio, Generali Investments Luxembourg S.A., and Plenisfer Investments SGR S.p.A. (“Plenisfer Investments”). Plenisfer Investments is authorized as the management company of the UCITS - OICVM in Italy, regulated by the Bank of Italy - Via Niccolò Machiavelli 4, Trieste, 34132, Italy - CM: 15404 - LEI: 984500E9CB9BBCE3E272.
The Fund’s Management Company is Generali Investments Luxembourg S.A., a Luxembourg public limited company (société anonyme), authorized as a UCITS Management Company and Alternative Investment Fund Manager (AIFM) in Luxembourg, regulated by the Commission de Surveillance du Secteur Financier (CSSF) - CSSF Code: S00000988 LEI: 222100FSOH054LBKJL62.
Generali Asset Management S.p.A., a management company (SGR), is an Italian asset management company regulated by the Bank of Italy and tasked with acting as the commercial promoter of the Fund in EU/SEE countries where the Fund is registered for distribution (Via Niccolò Machiavelli 4, Trieste, 34132, Italy - C.M. No. 15376 - LEI: 549300LKCLUOHU2BK025).
Before making any investment decision, please read the Key Investor Information Document (KID), the Prospectus. The KIDs are available in one of the official languages of the EU/EEA country where the Fund is registered for distribution, and the Prospectus is available in English (not in French), as well as the annual and semi-annual reports on www.generali-investments.lu or upon free request to Generali Investments Luxembourg S.A., 4 Rue Jean Monnet, L-2180 Luxembourg, Grand Duchy of Luxembourg, email address: GILfundInfo@generali-invest.com. The Management Company may decide to terminate the agreements entered into for the marketing of the Fund. For a summary of your investor rights regarding an individual complaint or a collective action for a financial product dispute at the European and your country of residence levels within the EU, refer to the following link: https://www.generali-investments.lu/lu/en/institutional/about-us-sfdr The summary is available in English or in an authorized language in your country of residence.
This marketing communication is not intended to provide investment, tax, accounting, professional, or legal advice and does not constitute an offer to buy or sell the Fund or any other security that may be mentioned. Any opinions or forecasts provided are up-to-date as of the specified date, may change without notice, may not materialize, and do not constitute a recommendation or offer of any investment. Past or target performances do not predict future returns. There is no guarantee that positive forecasts will be achieved in the future. The value of an investment and any income derived from it may increase or decrease, and you may not recover the entire amount originally invested. Future performance is subject to taxation, which depends on each investor’s personal situation and may change in the future.
Please consult your tax advisor to understand the impact of taxes on your returns. The existence of registration or approval does not imply that a regulatory authority has determined that these products are suitable for investors. It is recommended to carefully consider the terms of the investment and to obtain professional, legal, financial, and tax advice, if necessary, before deciding to invest in the Compartment.
Generali Investments is a trademark of Generali Asset Management S.p.A. Società di gestione del risparmio, Generali Investments Luxembourg S.A., and Generali Investments Holding S.p.A. - Sources (unless otherwise specified): Plenisfer Investments and Generali Asset Management S.p.A. Società di gestione del risparmio.

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