5 March 2020

Kairos International Sicav Financial Income (class P) obtained the Blockbuster* rating from Funds People.

KIS Financial Income, in fact, recorded assets of over 311 million euros at 31/12/2019, collecting over 550 million euros in the last 3 years. (Source: Kairos data).

The target of the product is to offer capital appreciation in the medium-long term. It is an interesting portfolio diversification tool as it mainly invests in bonds from the financial sector, with a mainly European focus, with the aim of offering capital appreciation in the medium-long term, moving dynamically through the entire capital structure of the banks. The investable universe of this product is composed of a maximum of 70% in AT1 and the remaining 30% in other financial instruments of the financial issuers.

“We did not want to make the product purely directional, thus respecting the Kairos philosophy of active and flexible management. Our goal is to take advantage of all the opportunities offered by the market, but at the same time to calm the volatility of the sector”, explains Andrea Ponti, Senior Portfolio Manager and co-manager of the sub-fund together with Rocco Bove, Head of Fixed Income. “This allowed KIS Financial Income to be efficient, obtaining a sharpe ratio** of around 3% in 2019”.

Given the nature of the product, the fundamental analysis of the issuer and of the structure of each individual issue are the subject of very high attention and evaluation:

  • in order to assess the issuer risk, we first start with the geographical analysis, because the jurisdiction and the regulatory framework vary according to each country;
  • we look then at the single issuer, studying the quality of the capital;
  • finally we move on to the analysis of the bank’s profitability.

All of these analyses are reflected in the risk premium. This is why it is qualifying to rely on a professional manager.

The management idea is to exploit the risk-return ratio of subordinated debt securities, together with a dynamic approach. “We therefore suggest to our investors to use financial subordinates not only as a tool to improve returns, but also as a decorrelator in a more comprehensive asset allocation that thus immunizes exposure to a possible increase in interest rates” concludes Ponti.


* Blockbuster of Funds People 2020: it is a rating intended for the best-selling funds on the market which, at December 31, 2019, recorded assets in Italy greater than or equal to 200 million euros together with the data collected in the last three years which must be equal to 25% of the total fund assets (data recorded through Morningstar Direct).

** Sharpe ratio: The Sharpe ratio of a securities portfolio is a measure of the portfolio’s performance. Is the difference between the returns of the investment and the risk-free return, divided by the standard deviation of the investment (i.e., its volatility) (Wikipedia).