In the last article of our three‑part series on fixed income strategies for uncertain markets, Andrea Bertocchini, Country Head Benelux & Nordics at Groupe La Française, makes the case for taking exposure to long-term structural trends within the high-yield universe. She argues that in a world shaped by powerful and transformative forces, these trends could offer compelling risk-adjusted opportunities.
Building resilience through different approaches
As geopolitical tensions and persistent rate fluctuations reshape the investment landscape, fixed income investors should broaden their horizon turning into more niche strategies. Our fixed income strategies to navigate uncertain financial markets (Solutions obligataires CM-AM) allow access to diversified credit segments, each with distinct risk profiles and return drivers.
For long-term oriented investors, identifying and capturing structural growth trends is what ultimately builds lasting portfolio resilience. Convictions, responsible commitment and thematic focus are the key concepts of a sound fixed-income allocation. For those looking to go further, a differentiated approach anchored in the High Yield1 universe and long-term structural forces reshaping our economy could offer a powerful way to turn market disruption into sustainable opportunity.
Investing in long-term trends via the High Yield1 market
The world is undergoing profound and accelerating transformations that are reshaping industries, societies and economies. Four structural mega-trends are at the heart of this shift: technological innovation, driving disruptions across every sector; climate change, redefining how companies operate; demographic growth, creating new consumption patterns and social needs; and urbanization, fueling demand for infrastructure, housing and services. Gaining exposure to these structural challenges means investing in long-term growth potential, across multiple sectors and geographies.
These long-term structural trends are deeply aligned with the UN Sustainable Development Goals (SDGs), a globally recognized framework for building a more inclusive, equitable, and sustainable world. By investing in companies whose business models are mostly aligned with the SDGs, investors can support positive social and environmental impact while also supporting companies that are better positioned to innovate, attract capital, foster innovation and build resilient operations in an evolving landscape.
Within the High Yield1 universe, this translates into a focused allocation to “Tomorrow's Economy” companies, forward-thinking businesses in technological, healthcare, infrastructure, renewables and service sectors, poised to thrive as megatrends reshape the global economy. Representing around 26%2 of the High Yield1 market, these companies stand out for their resilience, with historical default rates three times lower than the broader High Yield1 market3 and a track-record of superior long-term performance4.
A differentiated approach to mega-trends in the High Yield1 market
La Française Credit Innovation is an innovative global High Yield1 fund designed to capture the long-term growth potential of four structural mega-trends shaping our future (technological innovation, urbanization, demographics, and climate transition).
Its investment logic draws inspiration from equity strategies specialized in thematic investments but applies it to credit markets, where rating agencies use a retrospective approach focusing on past balance sheets to evaluate future prospects. This inertia can create opportunities: credit ratings often lag improvements in fundamentals, even as companies grow. We thus believe that high-quality companies with solid credit profiles positioned on long-term growth trends are well placed to deliver stronger revenue growth, improving fundamentals and, ultimately, credit rating upgrades.
Moreover, La Française Credit Innovation investment universe is highly selective by design. Focused exclusively on “Tomorrow's Economy”, we exclude traditional sectors that lack long‑term structural growth drivers. More than 50%5 of the portfolio is currently allocated to US issuers as the most innovative companies in technology, healthcare, and demographic-linked sectors are predominantly US-based.
Sustainability is embedded at the core of the strategy. La Française Credit Innovation prioritizes companies most aligned with the SDGs that are relevant to its four mega-trends. For example, from SDG 7 (Affordable and Clean Energy) and SDG 13 (Climate Action) for Technological Innovation and Climate Change trends, to SDG 3 (Good Health and Well-being) and SDG 4 (Quality Education) for the Demographic Growth trend, as well as SDG 9 (Industry, Innovation, and Infrastructure) and SDG 11 (Sustainable Cities and Communities) for Urbanization one. Furthermore, the fund is Article 9 under the Sustainable Finance Disclosure Regulation (SFDR)6.
La Francaise Credit Innovation benefits also from high yield carry and spread compression potential, offering potential enhanced return with lower volatility and an enhanced risk adjusted return since inception7.
Conclusion
In a world shaped by powerful and irreversible megatrends, the ability to identify tomorrow’s winners today has never been more critical for long-term investors. Sustainability is not a constraint: it is a compass that points toward the most resilient and future-proof business model. It is precisely within this context that, committed to addressing future challenges with a more durable and resilient credit profile, La Française Credit Innovation could stand as a long-term solution, delivering credit exposure while satisfying sustainability objectives that are increasingly non-negotiable for end investors.
Main risks of the fund: risk of capital loss, discretionary management risk, interest rate risk, credit risk, default risk, risk related to investing in high-yield securities, and counterparty risk. Full risk information is available on the fund's prospectus.
1. High Yield bonds, also known as speculative-grade instruments, offer a potential higher return and more risk than Investment Grade bonds. 2. Sources: Credit Mutuel Asset Management as of 31/05/2024. Historical market trends are not a reliable indicator of future market behavior. This data is provided for illustrative purposes only. Depending on the date of publication, the presented information may differ from the updated data. 3. Sources: Credit Mutuel Asset Management and Bloomberg as of 31/05/2024. Default rates between 2013 and 2024. Historical market trends are not a reliable indicator of future market behavior. This data is provided for illustrative purposes only. Depending on the date of publication, the presented information may differ from the updated data. 4. Sources: Credit Mutuel Asset Management and Bloomberg as of 31/05/2024. Past performance is not indicative of future results. Performance is not guaranteed and may rise or fall. 5. Source: Credit Mutuel Asset Management as of 30/06/2026. Portfolio allocation may change at any time. Data is for illustration only and may differ from updated figures. 6. The Sustainable Finance Disclosure Regulation – UE 2019/2088 does not guarantee the performance of the funds. The investment decision must take into account all the fund's characteristics and objectives as described in the prospectus and the KIID of the promoted fund. A fund classified as Article 9 under the SFDR incorporates sustainability risk considerations into its management, promotes social or environmental characteristics and sets out a sustainable investment objective. It is mandatory for a fund classified as Article 9 under the SFDR to invest in sustainable investments. 7. Source: Credit Mutuel Asset Management as of 30/06/2026. Past performance is not indicative of future results. Performance is not guaranteed and may rise or fall.
Disclaimer: Marketing communication intended for professional clients and distributors within the meaning of Directive 2014/65/EU (MiFID II).The information contained in this document does not constitute investment advice, an investment proposal, or any inducement to engage in financial market operations. The opinions expressed reflect the views of their authors as of the publication date and do not represent a binding commitment by Groupe La Française. These opinions are subject to change without notice, within the limits of the prospectus, which is the sole authoritative source. Groupe La Francaise shall not be held liable in any way for any direct or indirect damage resulting from the use of this publication or the information it contains. Historical market trends are not a reliable indicator of future market behavior. This data is provided for illustrative purposes only. Depending on the date of publication, the presented information may differ from the updated data. Past performance is not indicative of future results. Performance is not guaranteed and may fluctuate upwards or downwards. This publication may not be reproduced, in whole or in part, disseminated, or distributed to third parties without the prior written consent of Groupe La Française. www.la-francaise.com This communication was issued by Groupe La Française, a société Anonyme with executive boards and supervisory board with capital of €78836320 RCSPARIS480,871,490. Crédit Mutuel Asset Management: 128, boulevard Raspail 75006 Paris. Asset Management Company approved by the AMF under number GP 97,138. Société Anonyme with capital of euros 3,871,680 registered in the Paris Trade and Companies Register under number 388,555,021 APE Code 6630Z. Intra Community VAT: FR 70 3 88 555 021. Crédit Mutuel Asset Management is a subsidiary of Groupe La Française, the holding company for the asset management division of Crédit Mutuel Alliance Fédérale. La Française Finance Services, an investment company authorised by the ACPR under no. 18673 (www.acpr.banque-france.fr) and registered with the ORIAS (www.orias.fr) under no. 13007808 on 4 November 2016. Internet contact details of the supervisory authorities: Prudential Control and Resolution Authority (ACPR) www.acpr.banque-france.fr, Autorité des Marchés Financiers (AMF) www.amf-france.org
