Edmond de Rothschild Start

A solution for tumbling money market and bond yields

A solution for tumbling money market and bond yields

Investors have been struggling with falling bond and money market yields for several years. The low interest environment looks set to persist so investors will have to review allocation choices to improve their chances of returns. Generating extra yield necessarily entails diversifying sources of performance and reinforcing flexibility.

Edmond de Rothschild Start

  • An absolute return strategy with limited volatility

    Edmond de Rothschild Start is a low volatility, diversified fund which seeks absolute returns uncorrelated with international markets over the recommended investment horizon of 18 months. The fund aims to keep volatility below 3%.  The investment team takes a discretionary and opportunistic approach to equity, bond and currency markets with no benchmark constraints.

  • Two complementary strategies

    To meet its objective, the fund invests in two strategies

    • A bond sleeve which seeks to provide the portfolio with a solid base by aiming for regular returns 
    • An actively managed sleeve which seeks to generate extra performance by capturing opportunities across all asset classes  
  • The investment process blends investment convictions and flexibility

    The fund’s managers enjoy a vast investment universe and wide flexibility over positions and markets. Portfolio construction is based on the investment convictions of our Asset Allocation and Sovereign Debt team which comprises 11 complementary market specialists covering all asset classes.

Key figures

  • €500m under management
  • 1.2% in outperformance vs.
    EONIA over 3 years
  • 1.1% in 3-year volatility
  • 10 years of track record
/
Past performance and volatility is not necessarily a guide to future performance and volatility. Source: Edmond de Rothschild Asset Management. Data at May 31 2017 AUM: €494m (as of 31/05/2017). 5-year cumulative performance (C share) at 31/05/2017: +4.76% (an annualised +0.93%). Cumulative performance of the benchmark (Capitalised EONIA) over the same period: -0.31% (-0.03%).

Key points

  • A diversified fund which seeks positive returns which are uncorrelated with international markets whatever the prevailing market conditions
  • Targeted volatility of 3% max
  • An absolute return strategy which is particularly adapted to the current environment
  • A convincing track record since its 2007 launch
  • The fund is notably subject to capital loss and arbitrage strategy risk
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Main investment risks: the fund is rated as category 2, in line with the type of securities and geographic regions detailed under the heading “Objectives and investment policy”, as well as the currency of the unit. The risks described below are not exhaustive: it is the responsibility of investors to analyse each investment’s risk and to come to their own opinion.

Risk of capital loss: The UCITS does not guarantee or protect the capital invested, so investors may not recover the full amount of their initial capital invested even if they retain the units for the recommended investment period. Interest rate risk: Exposure to interest rate products (debt securities and money market instruments) makes the UCITS sensitive to interest rate fluctuations. Interest rate risk might result in a fall in the value of the security and, therefore, the NAV of the UCITS in the event of a change in the yield curve. Credit risk: The main risk linked to debt securities and/ or money market instruments such as treasury bills (BTFs and BTANs), commercial papers and certificates of deposit is that of issuer default, due either to the non-payment of interest and/or the non-repayment of capital. Credit risk is also linked to the downgrading of an issuer. Unitholders are reminded that the net asset value of the UCITS is likely to drop if a total loss is recorded on a transaction following the default of a counterparty. The inclusion of debt securities in the portfolio, whether directly or through UCIs, exposes the UCITS to the effects of variations in credit quality. Risk linked to investing in emerging markets: The UCITS may be exposed to emerging markets. In addition to the individual risks of each issuing company, external risks exist, particularly in these markets. Furthermore, investors’ attention is drawn to the fact that the operating and oversight conditions in these markets may differ from the standards that prevail on major international exchanges. Consequently, the holding of such securities may increase the portfolio’s risk profile. A fall in the market may thus be more marked and rapid than in developed countries, and the net asset value may fall further and more quickly and finally, companies held in the portfolio may have states as shareholders. Risk linked to arbitrage strategies: The UCITS may invest in UCIs which are able to take positions on the futures markets. However, financial market trends may turn out to be contrary to those anticipated by the tools used by underlying UCIs, which may result in a decrease in the net asset value.

May 2017. Non-binding document. This document is for information only. Legal Disclaimer: This document is non-binding and its content is exclusively designed for information purposes. Any reproduction, alteration, disclosure or dissemination of this material in whole or in part without prior written consent from the Edmond de Rothschild Group is strictly prohibited. The information provided in this document should not be considered as an offer, an inducement, or a solicitation to deal, by anyone in any jurisdiction where it would be unlawful or where the person providing it is not qualified to do so. It is not intended to constitute, and should not be construed as investment, legal, or tax advice, nor as a recommendation to buy, sell or continue to hold any investment. EdRAM shall incur no liability for any investment decisions based on this document. This document has not been reviewed or approved by any regulator in any jurisdiction. The regulation concerning marketing conditions of UCITS and AIFs ("Funds" hereafter) varies from country to country. The Funds presented herein may not be registered and/or authorised in your country. You should seek advice from your professional advisor if you are in doubt as to whether any of the Funds mentioned might be suitable for your individual situation. This document is not intended for citizens or residents of the United States of America or "U.S. Persons" as defined by "Regulation S" under the U.S. Securities Act of 1933. No investment product presented herein is registered under the Securities Act of 1933 or any other United States regulation. Then, they cannot be offered or sold directly or indirectly in the United States of America, to or to the benefit of residents and citizens of the United States of America and to «U.S. Persons». The figures, comments, forward looking statements and elements provided in this document reflect the opinion of EdRAM on market trends based on economic data and information available as of today. They may no longer be relevant when investors read this document. In addition, EdRAM shall assume no liability for the quality or accuracy of information / economic data provided by third parties. Any investment involves specific risks. We recommend investors to ensure the suitability and/or appropriateness of any investment to its individual situation, using appropriate independent advice, where necessary. Furthermore, investors must read the key investor information document (KIID) and/or any other legal documentation requested by local regulation, that are provided before any subscription and available at http://funds.edram.com section, or upon request free of charge. Past performance and past volatility are not reliable indicators for future performance and future volatility. Performance may vary over time and be independently affected by, inter alia, changes in exchange rates. Performance data does not include commissions and costs incurred on subscriptions and redemptions of units or shares of the Funds. « Edmond de Rothschild Asset Management » or « EdRAM » refers to the Asset Management division of the Edmond de Rothschild Group. In addition, it is the commercial name of the asset management entities (including branches and subsidiaries) of the Edmond de Rothschild Group.

GLOBAL DISTRIBUTOR & MANAGEMENT COMPANY
EDMOND DE ROTHSCHILD ASSET MANAGEMENT (FRANCE)
47, rue du Faubourg Saint-Honoré
75401 Paris Cedex 08
Société anonyme governed by an executive board and a supervisory board with capital of 11,033,769 euros
AMF Registration No. GP 04000015 - 332.652.536 R.C.S. Paris