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A dual stock-picking process for optimised efficiency Comprising the European equity team’s strongest eurozone conviction picks, which have already been subjected to a rigorous selection procedure, Edmond de Rothschild Euro Convictions showcases promising investment themes and trends that stand the best chance of outperforming the market at each stage in an economic cycle. For example, strategies with a stronger bias towards yield stocks do better when markets are falling while those focused on bid targets outperform in recovery phases. Restructuring plays with a value profile tend to do well in upturns. Meanwhile, companies with exposure to emerging zone growth, those which benefit from autonomous growth and firms with leadership positions are likely to perform well throughout a cycle. A concentrated selection of our best ideas The stocks in the Edmond de Rothschild Euro Convictions fund’s universe (roughly 100-150 companies) have already been subjected to in-depth fundamental analysis since they are held in Edmond de Rothschild Asset Management’s four European equity funds. After filtering out stocks which are not in the eurozone, we obtain 80-90 names. Our best conviction picks are based on company fundamentals, valuation levels and potential upside, etc. This bottom-up approach is followed by a review of the macroeconomic and stock market environment which allows us to pinpoint the 30-50 stocks which make up the final portfolio. At the same time, positions are tactically adjusted to optimise the portfolio’s risk/return profile. This stage involves taking special care over the portfolio’s sector and geographical breakdown so as to avoid being over-exposed to a sector or country. Our strong point: genuine investment expertise in euro equities For more than 2 years, Edmond de Rothschild Asset Management has been running a dedicated euro equities fund for a leading French institutional investor using a similar strategy to the Edmond de Rothschild Euro Convictions fund. The fund in question has posted gross returns of more than 24% since July 3 2009[1], i.e. gross outperformance of 15% compared to its benchmark index, the MSCI EMU (EUR) net dividends reinvested, at December 30 2011. Edmond de Rothschild Asset Management’s European equity team also runs a notional mandate (identical to a mandate managed by 16 other investment firms) for amLeague, an independent company which provides investment professionals with an objective yardstick to measure and compare active investment management returns. Since launch, Edmond de Rothschild Asset Management’s amLeague “Euro Fully Invested” mandate has returned 2.60% with volatility of 21.55%[2].This ranks it 1st out of 17 for risk-weighted performance. It is also the only fund to have posted positive returns over the period, outperforming its benchmark index, the Eurostoxx (net dividends reinvested) by more than 7.5%. Olivier Huet, ranked AA by Citywire,[3] is the lead manager of EdR Euro Convictions.
[1]Performance from 03/07/2009 (date when a similar strategy to that of EdR Euro Convictions was adopted) to 30/12/2011. Past performance is not a reliable indication of future returns and is not constant over time. [2]Performance from June 30 2010 to December 30 2011. Past performance and volatility is not necessarily a guide to future performance and volatility and is not constant over time. [3]Latest Citywire EuroStars Ratings. These are based on the manager’s three year risk-adjusted performance to 31st August 2011 and are valid until June. 1Citywire’s ratings and are not “market ratings” nor are they recommendations to buy, sell or hold any share or unit of funds managed by Edmond de Rothschild Asset Management. |
Nieuws / Actueel / Edmond de Rothschild AM launches Euro Convictions Fund