Funds Reports
Atlantic Bond Fund: September 2026 Report
Welcome to the Atlantic Bond Fund September 2026 Report, available for download below.
Hi all,
September was a particularly challenging month for fixed-income markets, as synchronized interest-rate increases by major central banks and renewed inflation concerns triggered a sharp repricing of sovereign yields. Despite relatively resilient corporate credit fundamentals, the increase in underlying government yields affected valuations across virtually all fixed-income segments. Against this backdrop, the Fund recorded a -1.53% return.
September Highlights:
Performance: Fund -1.53%, primarily reflecting higher sovereign yields and tighter monetary conditions.
Portuguese Corporate Bonds: Main detractor (-58 bps), led by Fidelidade (-18 bps), REN (-12 bps) and Crédito Agrícola (-7 bps). The decline was primarily interest-rate-driven rather than attributable to issuer-specific credit deterioration.
International Debt: EUR-hedged Emerging Market Debt (-15 bps) and unhedged EM Debt (-2 bps) both detracted, reflecting the rise in global yields.
Financial & European Credit: AT1 Financials (-19 bps) and Euro High-Yield Bonds (-14 bps) were also negatively affected by higher yields and some spread widening.
Global Convertibles: Contributed -8 bps, as the increase in bond yields outweighed the benefits of equity-market resilience.
Alternatives: Gold detracted -16 bps, declining approximately -3.6% in EUR as higher real yields increased the opportunity cost of holding non-yielding assets.
Portfolio Activity & Positioning: No material allocation changes. The portfolio offers an attractive 4.93% yield-to-maturity, with a moderate 2.93-year effective duration.
While September's performance was disappointing, we believe it is important to distinguish between interest-rate repricing and credit deterioration. Corporate credit spreads remain relatively contained, while the significant increase in bond yields has materially improved prospective returns. Our strategy remains focused on capturing attractive carry, maintaining disciplined duration and preserving flexibility rather than taking aggressive directional positions on interest rates.
More importantly, with the Fund's yield-to-maturity approaching 5% - a level rarely seen in recent decades- the prospective return outlook has become increasingly attractive. At the same time, the portfolio's duration has declined, reducing its sensitivity to further interest-rate increases. This combination of higher starting yields and lower duration provides a compelling foundation for strong total returns over the next 12 months, even without a meaningful decline in interest rates.
Best regards,
Nuno Serafim
Month Report ABF - September 2026
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Managing Partner
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Nuno is an experienced financial executive with broad experience in the Asset Management industry, being board member of IMGA, where he served as Chief investment Officer, overseeing €3.4B of AuM before he founded 3 Comma Capital, together with Robert and Patrick Hable in 2022.
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