Edmond de Rothschild Asset Management has launched Edmond De Rothschild Euro Convictions, the firm’s top conviction picks in Europe.
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.
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.
The firm’s 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.
Edmond de Rothschild Asset Management has launched Edmond de Rothschild Euro Conviction across Europe (UK, France, Germany, Italy, Spain, Benelux…), thus strengthening its offer targeting major European institutional investors.
For more than two 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 3 July 3 2009, (gross outperformance of 15% compared to its benchmark index, the MSCI EMU (EUR) net dividends reinvested, at 30 December 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%. 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 (pictured), ranked AA by Citywire, is the lead manager of EdR Euro Convictions.
