AGEFI Luxembourg - avril 2024

Avril 2024 31 AGEFI Luxembourg Fonds d’investissement OPINION - By Prof. Bruno COLMANT, Ph.D., Member of the Royal Academy of Belgium S ince ancient times, gold has been a refuge from financial crises. Hoarding is a response to an age-old reflex: a lack of confi- dence in the financial system. There aremany reasons for this metallic craze. Gold has intrinsic qualities, such as its inalterability over time and redu- ced volume. Moreover, since gold bars are now stamped, gold quantities are standardized in terms of purity andweight. However, one element characte- rizes the recent phenomenon of hoarding. In the past, goldwas a res- ponse to mistrust of fiduciary money, i.e., paper money issued by governments. Moving back to gold reflects fears about electronicmoney, i.e., systemic ban- king risks and inflation. Inflationary pressures could be generated by the liquidity injected into the banking systemand the public deficits created by stimulus packages. From this perspective, gold is a natural refuge against currency erosion. This has been the case during significant currency crises, such as the French assignments of the French Revolution or the hyperinflation in Germany between the wars. Moreover, for a very long time, the most stable and durable monetary systems were those convertible into gold, such as the gold franc (or germinal franc), created in 1803 and lasted until 1928. The BrettonWoods system, conceived in 1944, also postulated the convertibility of the main currencies into gold until it was abandoned by U.S. President Nixon in 1971. In 1976, the Kingston Accords in Jamaica confir- med the abandonment of gold's international legal role. However, what is troubling is that, throughout history, gold has been a metallic refuge for savers as much as for the institutions chargedwith ensu- ring monetary confidence. In other words, states sometimes profited greatly from the gold standard to the detriment of their citizens. The history of finance is replete with illustrations of counterfeiting states, which is why the privi- lege of minting money was reserved for kings. In Athens, for example, the face value of coins was higher than that of their production cost. King Croesus of Lydia (596-547 BC) circulated coins containing only 54% gold rather than the promi- sed 70%. Later, in the Middle Ages, Philippe le Bel (1268-1314) was undoubtedly one of the most famous swindlers in the Capetian family. Called a counterfeiter by Pope Boniface VIII, he changed currency parities to suit his personal needs. The king even changed the composition of silver coins, replacing the precious metal with billon (or black silver), amixture of silver, copper, and lead. The king also had to deal with severe rebellions, which he fiercely suppressed. Financially strap- ped, Philip the Fair obtained the agreement of Pope Clement V to declare the Knights Templar heretics and seize their property. Eight centuries later, the Templars' treasure is still being sought. However, all communities have the same reflexes when confidence is lost, rushing to metal markers when monetary milestones become blurred. One day, liquidity injections, sti- mulus packages, and budget deficits will come at a price. This no doubt explains the gold reflex. Moreover, with the U.S. elections approaching, the risk to the dollar from the plausible election of controversial figures such as Donald Trump can be hedged with gold. It cannot be ruled out that Donald Trump, whose repeated aim is to strip the Federal Reserve of its independence, will decide, if elected, to depreciate the dollar to reverse economic dynamics sharply. The aim would be to develop the United States export potential while penalizing American imports, subject to sharply increased tariffs. Howcould sucha scuttlingoperationbe carriedout in the context of what has been dubbed a "currency war"? Since U.S. dollars held outside the U.S. are not dollars issued by the Federal Reserve but are exchanged between central banks, a dollar deposit made by a European citizenwith a European bank is, in reality, a euro deposit exchanged by the ECB with the U.S. Federal Reserve. If this exchange agreement is terminated, the dollar collapses. with the entire banking system outside the United States. Such an act would amount to what some call a "weaponization" of the dollar. Such a collapse is not out of the question since the United States has orchestrated three monetary coups d'état since the creation of the Federal Reserve in 1913. The first was the devaluation orchestratedbyFranklinRoosevelt, President of the UnitedStates, from1933 to 1945.As part of hisNew Deal policy to combat the Great Depression, he devalued the dollar against gold in 1933-34. The second monetary coup occurred in 1971 when the Bretton Woods Agreement was abandoned. The third was the massive sale of toxic real estate loans to foreign banks between 2005 and 2008, culmina- ting in the banking crash 2008, known in retrospect as the subprime crisis. Whatever the future scena- rios, the predominance of the dollar is untenable. Moreover, goldwill remain a benchmark asset. The gold coin affair and Trump I nvestment flows towards EU ESGUCITS funds surged last year. Article 8 andArticle 9 funds reached €6.2tn at end- 2023, an increase of €1tn year- on-year, and assets under management (AuM) are now projected to reach over €9tn by 2027, according to the latest ESG data fromPwC Luxembourg. Published onApril 9, EUESGUCITS – Article 8 as a Middle Ground?* is the fifth edition of PwC Luxembourg’s ESG UCITS posterswhichhighlighttheevo- lution of ESG funds across the EuropeanUnion,includingasset manager rankings, breakdownof Article 8 and 9 funds, and data on leadingdomiciles. Luxembourg remains the leading domicile for ESG UCITS funds in theEUby far,with45.7%of the total AuM of Article 8 funds and 60.8% of the total AuM of Article 9 funds, while Amundi has the greatest number of Article 8 Funds compared to other asset managers. Key findings include: - Top asset managers by AuM of Article 8 Funds: BlackRockmaintainsitsleadingposition among asset managers with respect toArticle 8 UCITSAuM(€432.6bn),followedbyJPMorgan (€333.3bn) andAmundi (€321.9bn). - Top asset managers by AuM of Article 9 funds: Pictet topped the list with an AuM of €25bn in its Article 9 funds, followed closely by Handelsbanken (€24.8bn) and Candriam (€23.9bn). - Top EU ESG funds domiciles by AuM: Luxembourg is by far the leading domicile in ESG funds in the EU with 45.7% of the total AuM of Article 8 funds and 60.8% of the total AuMofArticle 9 funds. Luxem- bourg is followed by Ireland, France and Sweden. -Topassetmanagersbynumberof Article 8 funds: Amundi continues to leadonthenumberofArticle8funds(521),followed by BNPParibas (278) andDWS (261). -Topassetmanagersbynumber ofArticle9 funds: With 30Article 9 funds, Candriam is in the lead, fol- lowed byMirova (24) andBNPParibas (21). - Active/Passive split by number of Article 8 and 9 Funds: Among the Article 8 funds, 9,373 were ac- tivelymanagedwhile1,108werepassivelymanaged as of end-2023. As for Article 9 funds, 869 were ac- tivelymanagedwhile 94were passivelymanaged, a slight decrease compared to 2022. -TopEUESGUCITSbynetflows: AmongArticle8 funds,MorganStanley’s USDLiquidityFund took the leadinattractingnetflows(€9.3bn),followedbyState Street’s USD Liquidity LVNAV (€8.7bn). For Article 9 funds,Handelsbanken’s GlobalIndexCriteria tookfirst placewith€1.6bn,followedbyCandriam’s Sustainable Bond Euro Corporate with €0.8bn innet flows. - Top EUESGETFs by net flow: ForArticle 8 ETFs, JPMorgan’s USResearchEnhanced IndexEquity (ESG) took thefirst placewith€2.1bn innet flows, followed by DWS’ Xtrackers MSCI World ESG UCITS with €1.6bn.ForArticle9ETFs,Legal&General’s USESG Exclusions PA topped the charts with €0.9bn in net flows, followed by JPMorgan’s Carbon Transition Global Equity with €0.7bn . Frédéric Vonner (portrait), Partner and Sustainable Finance&SustainabilityLeaderatPwCLuxembourg said: “Since the introduction of the Sustainable Fi- nance Disclosure Regulation in 2021, sustainable fi- nanceinvestmentshaveskyrocketedandcontinueto doso,asevidentfromthe€1trillionjumpwe’veseen inAuMinArticle8andArticle9UCITSfunds,reach- ing €6.2 trillion in end-2023. We do not expect this growthtoslowdownanytimesoon,andnowproject ESG UCITS AuM in the EU to reach €9.4 trillion by 2027.Our latest data showcases a shift towardsmore diversified sustainable investment strategies: While equitiesremaindominant,weseegrowinginterestin Article 8 money market funds and passive options such asArticle 8 andArticle 9 ETFs which now rep- resent 24.4% of the total AuM of EU ETFs. With the ongoing review of the SFDR, investors can expect even greater clarity and standardisation in the years tocome,whichmayfurtherpropelthegrowthofsus- tainable investing in the EU.” * Discover the fifth edition of the PwC EUESGUCITS poster: https://www.pwc.lu/en/sustainable-finance/esg-ucits-poster.html EU ESG UCITSAuM set to reach over €9tn by 2027 uM as of en y A es b s Domicil Ar und op EU ESG F T ticle 8 AuM,EURbn # of funds 4,281 1,506 1,446 504 610 233 468 246 387 218 134 320 58 Luxembourg 2,693.5 Ireland 1,269.1 France 716.4 Sweden 392.2 Germany 185.1 Denmark 137.7 Netherlands 126.0 Spain 93.4 Italy 83.7 Finland 74.3 Belgium 58.2 Austria 46.8 Portugal 10.3 DistributionMarkets ofKeyEUDomiciles as of end-2023 Article8 Par Edgar MEHRABYAN, Investment Specialist, AXA IM Mythe n° 1. Les rendements des obligations vertes sont inférieurs à ceux des obligations classiques L es obligations vertes se comportent comme des obligations conventionnelles et leur ren- dement est tributaire de di- vers facteurs tels que les conditions dumarché et les fondamentaux de l'émetteur enmatière de crédit. Il convient de noter que les projets environnementaux financés par des obligations vertes n'ont pas d'incidence directe sur le risque ou la performance de l'émetteur. Commelemontrelegraphiqueci- dessus(performanceannuelle),les obligations vertes peuvent offrir des rendements attrayants et ont surperformé l'univers des obliga- tionsconventionnellessurcinqdes sept dernières années civiles. À l'heure actuelle, les obligations vertesoffrentauxinvestisseursdes rendementsattrayantstoutenleur permettant d'accéder à des émet- teurs qui investissent dans la tran- sition vers une économie bas car- bone. On observe en outre une diminution du «greenium» (écart de rendement entre obligations vertes et obligations convention- nelles), qui se rapproche de la parité. Au 29 février 2024, le gree- nium avoisinait enmoyenne les 2 pb sur le marché des obligations vertes en euros. Mythe n° 2. Les obligations vertes constituent unplacement deniche Ce qui était sans doute vrai il y a une dizaine d'années lorsque le marchéétaitencoreembryonnaire est aujourd'hui dépassé. Le mar- ché des obligations vertes s'est considérablement développé ces dernières années, avec unéventail d'émetteurs toujours plus large et uneliquiditécroissantepermettant une plus grande diversification sectorielle et régionale. L'univers desobligationsvertessecaractérise également par une diversification croissanteauseindusegmentcré- ditdumarché,ainsiqueparlapart de plus en plus importante des obligations souveraines. Cette évolution, associée à la prise de conscience croissante de la nécessité d'opérer une transition vers une économie bas carbone, ouvre des perspectives d'investis- sement attrayantes et contribue à faire des obligations vertes une composante crédible de l'alloca- tion globale de la majorité des investisseurs. Mythe n° 3. La taille du marché des obligations vertes est relati- vement modeste L'expansion du marché des obli- gations vertes a été spectaculaire ces dix dernières années avec un nombre croissant d'émetteurs pri- vés, publics et institutionnels. Commel'indiquelegraphiquesui- vant, même dans le contexte diffi- cile de 2023, les émissions d'obli- gations vertes ont battu tous les records, avec un volume attei- gnant 422 milliards de dollars (1) . Cettetendancesepoursuiten2024 et le volume d'émission s'élève aujourd'hui à 1.620 milliards de dollars, pour plus de 740 émet- teurs (2) . Cette croissance s'est tra- duite par la création d'une multi- tudedesolutionsd'investissement allantdesstratégiesinternationales auxstratégiesàdurationcourteen passant par les stratégies total return,etvisantàoffrirdessources d'alpha comparables à celles de l'universdeplacementplusglobal. On observe depuis quelques années une montée manifeste de l'intérêt des investisseurs plus «conventionnels». Cet intérêt devrait se maintenir, les investis- seurs cherchant à accroître leur contribution en faveur de l'envi- ronnementtoutens'exposantàun marché en pleine croissance, très diversifié et dont la liquidité ne cesse de croître. 1) Source : Bloomberg au 31 décembre 2024 2) Source : Bloomberg au 29 février 2024 Obligations vertes : les trois principales idées reçues Source:AXAIM,Bloombergau29février2024 Source:AXAIM,Bloombergau29février2024