# MANAGEMENT REPORT
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## Launch date of the sub-fund and subscription price of the shares



## Initial subscription date: 17/09/2009. Initial subscription price: EUR 100.00.
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## Stock exchange listing


## The sub-fund's shares are not listed on the stock market.
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## Objective and main outlines of the investment policy

| Objective |
| --- |
| The objective of the sub-fund is to offer investors exposure to debt securities denominated in any currency, whose interest payments and/or capital redemption depend on the movement in inflation in a given country or geographical region. No formal guarantee has been given either to the sub-fund or to its investors. This is an actively managed sub-fund, which means that the portfolio manager does not aim to replicate the performance of a benchmark. |
| Investment policy |
| The sub-fund invests principally, without any form of sector restriction, a minimum of 75% of its net assets , in fixed or floating rate bonds and/or other debt securities, denominated in any currency and for which the payment of interest and/or redemption of capital depends on the movement in inflation in a given country or a geographical region, which may include, but is not limited to the following list: credit-linked notes* and fiduciary notes** with underlying instruments that have identical characteristics. The sub-fund may, on an ancillary basis, invest in money market instruments such as for example, certificates of deposit, treasury notes and/or promissory notes, and bonds and/or other debt securities, including fixed or floating rate credit-linked notes and fiduciary notes denominated in any currency and on which the payment of interest and/or the redemption of principal is not dependent on the movement in inflation in a given country or geographical region. In order to be eligible, those marketable securities forming the principal part and the ancillary part of the portfolio, must be (i) issued or guaranteed by a country, including, where applicable, its regional public authorities or by international or supranational public bodies, or (ii) issued by (governmental, public, semi public or private) institutions held or financed by one or several public players, such as countries, regional public authorities or public international law or supranational bodies and undertakings entrusted with the provision of services of public or general interest, or (iii) benefit from a mechanism guaranteeing a priority redemption in the event of default by the issuer. The payment flows from bonds and/or other debt or equivalent securities, whose interest payments and/or redemption of principle are determined by inflation, generally have the following configuration: Coupon payment = coupon in % * nominal amount * (Index t/Index°) Reimbursement = nominal amount * (Index T/Index°) in which: Coupon in % = fixed coupon of the bond (which is normally equal to the actual yield on the issue date of the bond) |


## Index° = a 3-month inflation index before the issue date of the bond (base index) Index T = a 3-month inflation index before the payment date

## Index T = a 3-month inflation index before the due date

## The sub-fund may hold liquid assets on a secondary or temporary basis in the form of current accounts or deposits, and in the form of undertakings for collective investment.

## The sub-fund may invest a maximum of 10% of its assets in open-ended undertakings for collective investment in order to indirectly achieve the above-mentioned target or place its liquidity.

## * Credit-Linked Note: financial instrument issued by a financial institution in the form of a debt security on which the payment is connected to another bond or loan.

## ** Fiduciary Note: differs from a credit linked note in that the buyer does not bear risk of the financial institution which issues it.
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## Financial management of the portfolio


## Degroof Petercam Asset Management S.A. Rue Guimard, 18, 1040 Brussels
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## Index and benchmark


## The sub-fund uses the following index as a benchmark: Bloomberg Barclays Universal Inflation Linked GDP Weighted IG.
This index is representative of the global inflation-linked bond market. It is a custom index for DPAM calculated by Bloomberg Index Services Limited. The index includes inflation-linked bonds issued by countries with an investment grade rating. Countries are weighted according to their GDP (gross domestic product). Performance is calculated by reinvesting the coupons paid by the debt securities making up the index.

## This is an actively managed sub-fund, which means that the portfolio manager does not aim to replicate the performance of a benchmark. The benchmark is used as a means of comparing performance.

## The possible composition and the value of the benchmark can be found on the website www.dpamfunds.com.
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## Policy followed during the year

Ever since the market volatility created around March 2020 following the introduction of the lockdowns, inflation expectations have recovered, meaning that the bond markets were pricing gradually higher and higher future inflation. This trend continued well into 2021, but started to flatten from April onwards, meaning that the strategy had a good recovery and outperformed equivalent nominal strategies.
We started the year with a duration close to the benchmark. Global interest rates were somewhat under pressure as a post-Covid recovery was being priced in, increasing the expectations that central banks would at some point ease their ultra-accommodative policies. As interest rates inched higher, we cut our duration exposure during the month of February when 10-year US yield crossed 1.25%. We mainly cut the markets with higher interest rate volatility, like New Zealand, Australia and the US. The duration fell to about 0.5 below the benchmark. During this period the portfolio lost some value versus the benchmark due to it larger exposure to those

## markets. We remained overweight the European periphery markets like Italy and Spain. These markets have also continued to recover adding to the portfolio performance.
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## Future policy

Over the medium-term, we see an economic recovery as COVID-restrictions ease on the back of the roll-out of vaccines. Markets have started to price in future reductions of the ultra-accommodative central bank policy but the uncertainty about the strength of the recovery makes the time-line uncertain.
We feel there is an overall positive sentiment, by virtue of all the sentiment indicators printing very high numbers. The risk of disappointed or underperforming expectations is real. We therefore do not want to reduce duration now.
Indeed, the many fiscal packages are likely to provide a significant boost to economy activity and the recovery, but the question is to what extend they will have a lasting impact on the economic fabric (e.g. potential growth and structural inflation). This is important as we want to avoid a ‘sugar low’ following the fiscal boost, but also, if the medium to longer-term economic outlook remains similar to the pre-pandemic period, we essentially would likely have a similar rates outlook, but with a higher debt overhang.
Over the short and medium term, we expect that increased government regulation and control, climate-related transition costs, disruptions in supply chains, deglobalization (or better: regionalization) and basis effects to push inflation temporarily higher.

## The medium to long-term outlook remains supportive of low real rates: low productivity growth; and high debt overhang.

## As a key risk we see a slow global vaccine roll-out or a lower effectiveness of the vaccine against certain variants, therefore delaying the economic recovery.
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## Synthetic risk and reward indicator


## The synthetic risk and return indicator give an indication of the risk associated with investing in a sub-fund. It places this risk on a scale ranging from one (lowest risk) to seven (highest risk).

## Risk and reward profile: 4

## With the exception of classes Hedged (A EUR Hedged, B EUR Hedged, E EUR Hedged, F EUR Hedged, J EUR Hedged, M EUR Hedged, N EUR Hedged, P EUR Hedged): 3
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Translation (ENFR, 2021-06-30):
# RAPPORT DE GESTION
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## Date de lancement du compartiment et prix de souscription des actions



## Jour de souscription initiale : 30/07/1999.

## Prix de souscription initiale des parts : 10.000,00 EUR.
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## Cotation en bourse


## Les actions du compartiment ne sont pas cotées en bourse.
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## Objectif et lignes de force de la politique de placement

| Objectif |
| --- |
| L’objectif du compartiment est d’offrir aux investisseurs, par le biais d’une gestion équilibrée du portefeuille, une plus-value à long terme en investissant dans des titres de capital et/ou des titres de créances d’émetteurs du monde entier. Aucune garantie formelle n'a été octroyée au compartiment ni à ses participants. Il s'agit d'un compartiment géré activement. Aucun benchmark n'est utilisé dans la gestion du compartiment. Des informations quantitatives provenant d'un marché plus large peuvent être utilisées pour la gestion des risques et l'évaluation par le gestionnaire. |
| Politique de placement |
| Le compartiment investit principalement (sans restriction sectorielle ou géographique quelconque mais principalement en Europe), dans (i) des actions et /ou d’autres titres donnant accès au capital d’entreprises et (ii) des obligations et/ou d’autres titres de créance, à rendement fixe à court, moyen et long terme. Le compartiment peut détenir des liquidités à titre accessoire ou temporaire sous forme de comptes courants ou de dépôts, ainsi que sous forme d’organismes de placement collectif. |

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## Gestion financière du portefeuille

| Degroof Petercam Asset Management S.A. |
| --- |
| Rue Guimard, 18, 1040 Bruxelles |

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## Indice et benchmark

| Non applicable. |
| --- |
| Aucun benchmark n'est utilisé dans la gestion du compartiment. |

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## Politique suivie pendant l’exercice

Depuis l'annonce des vaccins anti-Covid-19 en novembre 2020, le portefeuille a été fortement surpondéré en actions et cette situation n'a pas changé au cours du premier semestre. De nombreux pays de l'UE étant toujours aux prises avec des restrictions et au vu du retard dans le déploiement des vaccins, la nouvelle année a commencé en demi- teinte. Cependant, le soutien combiné des banques centrales et des gouvernements, ainsi que la vaccination mise en place au cours du deuxième trimestre, nous ont rassurés quant au positionnement du fonds. Au cours de cette période, nous avons ouvert plusieurs positions qui bénéficient d'une réouverture de l'économie (Marr, CTS
Eventim...). Nous avons ainsi créé, pour le volet actions, une haltère entre les valeurs cycliques / défensives et les valeurs de croissance / de valeur afin de tenir compte de la rotation des styles. Nous avons également joué sur diverses opportunités qui, à terme, généreront de la valeur pour le portefeuille (Kingspan, GBL, ALD, SAP, Konecranes). Dans le volet obligataire, nous avons participé à l'émission de VGP, pris des bénéfices de manière sélective sur un certain nombre de positions (Wells Fargo, Heineken et Barclays) et réinvesti dans une obligation Goldman Sachs. Nous avons également échangé des obligations à court terme de Total et d'Enel Finance au sein d'un même émetteur contre des obligations à plus long terme afin d'améliorer le rendement.
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## Politique future

Nous restons constructifs sur les actifs à risque, mais les valorisations élevées et le fait que les bons résultats trimestriels n'ont généré aucun rendement supplémentaire nous ont amenés à une phase de consolidation. Nous partons du principe que les actions de valeur ont connu leur principal rattrapage et que le marché connaîtra dorénavant une évolution plus équilibrée. Nous conservons cependant notre haltère car une nouvelle hausse de l'inflation et des taux d'intérêt pourrait encore jouer en faveur des actions de valeur. À court terme, les banques centrales sont prêtes à passer au travers d'une forte hausse de l'inflation, mais elles interviendront si nécessaire, car il ne faut pas qu'elle pèse sur la reprise économique. Nous restons donc prudents quant à la sensibilité du portefeuille aux taux d'intérêt. Les obligations d'entreprises offrent peu de perspectives en termes de spread, mais la hausse des rendements par rapport au Bund reste intéressante et stable.
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## Indicateur synthétique de risque et rendement


## L’indicateur synthétique de risque et de rendement donne une indication du risque lié à l’investissement dans un

## compartiment. Il situe ce risque sur une échelle allant de un (risque le plus faible) à sept (risque le plus élevé). Profil de risque et de rendement : 4
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