This component represented 44.4% of the FRR’ s net assets at 31 December 2017. It notably includes investment mandates taking a matched approach to buying and holding12 French government bonds so as to service a substantial part of the CADES payment up to 2024, but also includes investment grade corporate bond mandates.
The steady decrease in government bonds yields over recent years has led the FRR to continue diversifying the hedging assets by increasing the weighting of corporate bonds to take advantage of a higher yield, which now accounts for most of the return on bonds. The weighting of these corporate bonds in the hedging assets reached 60% in 2017. Bonds issued in dollars are hedged against exchange risk.