Edmond de Rothschild

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EdR Fund Floating Rate Credit Corporate bonds

Corporate bonds
Change in NAV (19/09/2018)
99.24 EUR
Benjamine  NICKLAUS–LU1781814832–
Benjamine NICKLAUS
Léo ABELLARD–LU1781814832–
Léo ABELLARD
The identity of the managers presented in this document may change during the life of the product.
Risk and reward profile (1)
1234567
Recommended holding period
Between 12 and 24 months
99.24 EUR
Change in NAV (19/09/2018)
2
1234567
Risk and reward profile
Between 12 and 24 months
Recommended holding period
Change in NAV (19/09/2018)
99.24 EUR
Risk and reward profile
1234567
Recommended holding period
Between 12 and 24 months
Benjamine NICKLAUS  
Léo ABELLARD  
The identity of the managers presented in this document may change during the life of the product.
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Investment objective

The Sub-Fund's investment objective is to outperform its benchmark, net of management fees, over an investment horizon of one to two years, through a portfolio representing investment opportunities present on the short-term corporate credit markets.

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Commentary 31/08/2018

Central banks are still continuing slowly down the path of exiting their ultra-accommodative policy. In the US, a rate hike in September has been well telegraphed by the FED and a second rate hike in December is partially priced in by investors. No specific news regarding the European Central Bank came out in August, with investors focusing on the September meeting. The ECB will halve its asset buying program (from EUR 30bln to 15bln per month) from September. Following a significant spread tightening in July, global investment grade corporate spreads drifted slightly wider in August on the back of renewed geopolitical headlines (US-China trade tensions, budget talks in Italy, and especially the currency crisis in Turkey and Argentina). This widening was, despite the strong earning season results and relatively quiet primary issuance activity. However performances of EUR and US IG corporate markets were positive thanks to the lower yields in benchmark rates. US IG corporate market outperformed the EUR IG corporate market over the period. 10 year IG corporate spreads rose 8 basis points in the US and 12 basis points in the Eurozone. The HY market had a flat performance over the month as the negative performance of credit (spreads widened by 13bps) was compensated by the performance of underlying government rates. the Xover spread widened by 18 basis point to end the month at 300 bps. The negative excess return of HY credit was manly driven by BB's which returned -0.2% while lowest ratings registered decent gain in August (+1.75% for CCC and +0.6% for B). There was a great disparity within sectors as Construction & Materials and Consumer Goods lost respectively 2% and -0.9% while Basic Materials, technology and Industrial gained 0.8%. High yield companies' financial results for Q2 2018 were globally good with no specific deception. Mid-August, following a Financial Times article, investors were worried about some European Banks' exposures to Turkey. Spreads of the most exposed banks widened first before propagating to all the financial debts segment. In Italy, the political risk continued to weight on Banks and Insurance's companies as uncertainties remain high around new budget discussions expected in September. In August, all the segment of financial debts underperformed with Insurance Companies that were impacted the most with a spread widening of 34bps (or a total return of -1.16%) for perpetual instruments and -0.89% for Tier 2. On the banking side, Tier 2 had a negative return of -0.36%. Euro denominated Cocos lost -0.79% while those denominated in USD posted a thin positive performance (+0.09%). Over the month, Q2 results publications were mostly above expectations for financial issuers with French banks that performed well while Italian banks disappointed as capital ratios decreased due to BTP volatility. The primary market was very dynamic with close to EUR10 billion of financial debt issuances.

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Fund information

Inception Date (Fund)
07/01/1999
Inception Date (Part)
03/04/2018
Legal form
SICAV
Benchmark
EURIBOR EUR 3M
250BP
Currency (fund)
EUR
Currency (share class)
EUR
Distribution Policy
Accumulation
Valuation frequency
Daily
Minimum initial investment
1 Share
ISIN Code
LU1781814832
AuM (fund)
162 M (EUR)
Regulatory authority
CSSF
Management company
Edmond de Rothschild Asset Management (Luxembourg)
Delegated Management Company
Edmond de Rothschild Asset Management (France)
Incorporation
Luxembourg
Maximum management fee
0,600 %
Current management fee
0.600 %
Subscription and redemption conditions
Daily before 12.30 am C.E.T. on day's net asset value
Subscription fee
1.00 % max
Performance fee
15,000 %

Fund documentation

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(1) The rating grades the funds on a scale from 1 to 7. This rating system is based on the average fluctuations of the net asset value over the past five years. It corresponds to the variation range of the portfolio upwards and downwards. If the net asset value is less than 5 years old, the rating is determined by other regulatory calculation methods. Historical data such as those used to calculate the rating may not be a reliable indication of the future risk profile. The current category is neither a guarantee nor an objective. Category 1 does not signify a risk-free investment.

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