The asset manager for a changing world

BNP Paribas Flexi I US Mortgage

  • The fund invests primarily in a diversified range of mortgage-backed and asset-backed securities which are traded in Regulated Markets worldwide.
  • The fund may use financial derivative instruments for investment and/or hedging purposes, which may involve material additional risks, for example counterparty default risk or insolvency, volatility risk, liquidity risk, leverage risk and valuation risk, and may expose the fund to significant losses. For complete list of risks, please refer to the Product Highlight Sheet and Prospectus.
  • The fund is exposed to interest rate risk, credit risks and risks linked to Structured Debt/Securitised Products.
  • Investors should not solely rely on this document to make any investment decision. Please refer to the Singapore offering documents for further information (including the risk factors) about the fund.

The US agency mortgage-backed Securities (MBS) market is the world’s second largest bond market after the US Treasuries market1, making it one of the most liquid markets globally.

97% of the agency MBS positions held by the fund (e.g. in securities issued by US institutions such as Ginnie Mae, Freddie Mac and Fannie Mae) are rated AAA2 and have a US government guarantee. So agency MBS have the same top-level credit rating as a US Treasury security. Therefore, even in low risk periods, agency MBS are expected to outperform investment grade credit and other riskier bonds.

Why this fund?

The team managing BNP Paribas Flexi I US Mortgage has a sharp focus on security selection. They spend most of their time looking for bonds with attractive characteristics that should produce a high risk-adjusted return. The lead portfolio manager John Carey has been managing this strategy at the firm since 1998 and has been awarded for his performance many times. The fund also recently received 5 stars from Morningstar3.

Key strengths of BNP Paribas Flexi I US Mortgage

  • Awarded a 5-star all rating by Morningstar3
  • Strong returns from high-quality bonds with low correlations to the returns of traditional asset classes
  • Focus on opportunities in AAA-rated US agency MBS
  • A very experienced and stable portfolio management team
  • 1. Source: Bloomberg, Barclays, March 2018
  • 2. Source: Using Bloomberg Barclays Index methodology (rating agencies: Moody’s, Fitch, S&P), March 2018
  • 3. Source: Morningstar, March 2018

Past performance is not indicate of current or future performance

This material has been prepared by and is issued by BNP PARIBAS ASSET MANAGEMENT Singapore Limited*, a member of BNP Paribas Asset Management (BNPP AM)**. The content has not been reviewed by the Monetary Authority of Singapore (“MAS”).

This material is produced for information purposes only and does not constitute: 1) an offer to buy nor a solicitation to sell, nor shall it form the basis of or be relied upon in connection with any contract or commitment whatsoever; or 20 any investment advice.

Investors considering subscribing for the Financial Instrument(s) should read carefully the most recent prospectus, offering document or other information material and consult the Financial Instrument(s)’ most recent financial reports. The prospectus, offering document or other information of the Financial Instrument(s) are available from your local BNPP IP correspondents, if any, or from the entities marketing the Financial Instrument(s).

Opinions included in this material constitute the judgment of BNP PARIBAS ASSET MANAGEMENT Singapore Limited or its relevant affiliate[s] at the time specified and may be subject to change without notice. BNP PARIBAS ASSET MANAGEMENT Singapore Limited is not obliged to update or alter the information or opinions contained within this material. Investors should consult their own legal and tax advisors in respect of legal, accounting, domicile and tax advice prior to investing in the Financial Instrument(s) in order to make an independent determination of the suitability and consequences of an investment therein, if permitted.

Investments involve risks. Given the economic and market risks, there can be no assurance that the Financial Instrument(s) will achieve its/their investment objectives. Past performance and any economic and market trends/forecasts are not a guide to future performance and the value of the investments in Financial Instrument(s) may go down as well as up. Investors may not get back the amount they originally invested. The document shall not be reproduced, distributed or transmitted, in whole or in part, to any person.

Data Source – © 2016 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. Morningstar stars rank from 1 to 5, with the top ranking being 5 stars. All Morningstar ratings shown in this document are for Classic capitalising shares.

*BNP PARIBAS ASSET MANAGEMENT Singapore Limited, 10 Collyer Quay, #15-01 Ocean Financial Centre, Singapore 049315. Company Registration No: 199308471D.

** “BNP Paribas Asset Management” is the global brand name of the BNP Paribas group’s asset management services. The individual asset management entities within BNP Paribas Asset Management if specified herein, are specified for information only and do not necessarily carry on business in your jurisdiction. For further information, please contact your locally licensed Investment Partner.