Edmond de Rothschild Europe Value & Yield

An investment process adapted to today's economic environment

An investment process adapted to today's economic environment

Edmond de Rothschild Europe Value & Yield seeks to capture European equity performance with a long-term conviction-driven investment approach.

It benefits from a dual approach1, which is particularly suited to today’s market conditions, investing in Yield stocks2 which tend to provide protection if markets fall and Value stocks3 to capture equity market rises.

1 The above investment process comprises various internal investment constraints set up by the investment team. This is the current process but it may change over time.
2 Yield stocks refer to companies which generally pay out large dividends to shareholders.
3 Value stocks are considered to be undervalued.

The portfolio comprises a core percentage of yield stocks along with exposure to cyclicals, a blend which we believe is particularly well-adapted to tap into European growth.

A favourable environment for European equities

After gaining 21% over the first four months of 20154, European equities were hit by two successive walls of worry. Stocks fell sharply, first on concerns Greece might leave the eurozone and then on worries over China’s economic slowdown combined with lack of visibility over the Fed’s monetary policy decisions.

4 Performance of the fund’s benchmark, the MSCI Europe (NR), from 31/12/2014 to 27/04/2015: +21.39%. Performance from 27/04/2010 to 27/04/2015: 34.75%.

Today’s environment is still favourable for European equities which benefit from a number of factors like the European Central Bank’s accommodating monetary stance, much cheaper commodities and the weak Euro.

Key points

    - An equity strategy which is particularly adapted to today’s market conditions

    - An investment approach geared to providing a particularly attractive risk/return profile

    - An investment team renowned for its European market expertise

    - Targeted performance over a full economic cycle in return for a capital loss risk

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Edmond de Rothschild Asset Management (France)
47 rue du Faubourg Saint-Honoré
75401 Cedex 08 Paris

+ 33 1 40 17 25 25
Past performance is not a reliable indication of future returns and is not constant over time.

Main investment risks
The fund is a category 5 (C, D and I shares) or high risk/return fund profile which reflects its ability to be up to 110% exposed to equity markets. 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. These instruments will be subject to market trends and fluctuations.
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.
Capital loss risk: As the fund in this document does not have any guarantee or protection, the capital initially invested might not be restituted in full.
Equity risk: Share prices may move in line with factors specific to the issuing company but they may also react to external political and economic factors. Equity market fl uctuations may entail changes in the fund’s net asset value and might have a significantly negative impact on its performance. The fund’s performance will depend on the companies selected by the asset management company.
Exchange rate risk: This applies when stocks or investments are denominated in a different currency than that of the fund. Exchange rate risk may entail a fall in the fund’s net asset value if an investment is made in another currency that subsequently depreciates against the euro. As the fund seeks to invest in European community shares, stocks denominated in currencies other than the euro may theoretically represent up to 100% of assets. The FCP may in particular be exposed to movements in Sterling and the Swiss franc.
Interest rate risk: Funds holding debt securities and money market instruments are exposed to fluctuations in interest rates. The risk is as follows: rising interest rates cause bond valuations to fall and thus a decline in the net asset valuation of the fund or mandate.
Credit risk: Valuations of debt securities and other financial instruments are influenced by the issuing company’s credit rating. As a result, their capital value fluctuates according to the market’s perception of the financial health of their issuers and this may entail a fall in the fund’s NAV if the outlook turns negative. Credit risk corresponds to the risk that an issuer of bonds or money market instruments might not be able to honour his commitments.

October 2015. Non-binding document. This document is for information only.

Disclaimer: The data, comments and analysis in this bulletin reflect the opinion of Edmond de Rothschild Asset Management (France) and its affiliates with respect to the markets and their trends, their regulation and tax treatment, on the basis of its own expertise, economic analysis and information currently known to it. However, they shall not under any circumstances be construed as comprising any sort of undertaking or guarantee whatsoever on the part of Edmond de Rothschild Asset Management (France). All potential investors should consult their service provider or advisor and exercise their own judgement independently of Edmond de Rothschild Asset Management (France) on the risks inherent to each investment and its suitability to their own personal and financial circumstances. To this end, investors must acquaint themselves with the key investor information document (KIID) that is provided before any subscription and available at www.edram.fr or on request from the head office of Edmond de Rothschild Asset Management (France). .