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EdR Fund Emerging Bonds Emerging bonds

Emerging bonds
NAV (22/02/2017)
116.21 EUR
Jean-Jacques  DURAND–LU1160352438–
Jean-Jacques DURAND
Romain BORDENAVE–LU1160352438–
Romain BORDENAVE
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
> 3 years
116.21 EUR
NAV (22/02/2017)
5
1234567
Risk and reward profile
> 3 years
Recommended holding period
NAV (22/02/2017)
116.21 EUR
Risk and reward profile
1234567
Recommended holding period
> 3 years
Jean-Jacques DURAND  
Romain BORDENAVE  
The identity of the managers presented in this document may change during the life of the product.
Contact

Investment objective

The objective is to outperform the benchmark, over using discretionary management on all bond markets from emerging countries.

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Commentary 31/01/2017

In the footsteps of December, January was relatively calm for EM debt markets, breaking with the pattern of the past 3 years. Most of the volatility was centered on a single currency : the Turkish lira. Our fund EdR Emerging Bonds posted a return of +1.34% with hard currency debt up +1.26% (EMBI Global hedged in EUR) and local currency debt up +2.25% (GBI-EM index). To summarize it, another good month for Venezuelan debt compensated the drag from our Turkish lira exposure.In Turkey, political and geopolitical risks, adding to a less independent central bank were factors that colluded to put pressure on the currency, down 7% over the month. We were approaching moves reminiscent of Turkey's 2001 crisis when the country had a pegged currency, double digit inflation and massive debt loads and imbalances. This is clearly not the case today and debt metrics as well as FX exposure are much more solid. Later in the month, Turkey was downgraded in the sub-investment grade category by Fitch, the last of the big three to do so. This was largely priced in as bonds rallied the following day. Valuations and market positioning have reached attractive levels compared to fundamentals. As a result Turkey has become our second biggest country exposure. The Mexican peso managed to reverse course despite ongoing noise from the white house and some US automobile manufacturers reassessing investment plans in Mexico. Despite the current tension between the two countries and political gesticulation we see Mexico as one of the most interesting investment cases for the coming months. We have kept our exposure to the peso and initiated a position in local bonds. Inflows have been strong amid early year allocations, totaling USD 2.4 bn so far for EM debt, mostly in hard currency.These flows have been met with a substantial amount of primary market issuance including some noticeable jumbo deals from Argentina , Turkey or Egypt for sovereigns and several others for corporates. It seems that many issuers have been looking to use the window and squeeze deals before the US presidential inauguration and the uncertainty coming with the new administration. To put numbers into perspective January issuance reached USD 62 bn compared with USD 27 bn in 2016. For a change (our trusted investors will remember that we seldom participate in primary issues) we took this opportunity to participate in two issues, in Egypt sovereign and a corporate in the Ukrainian agri-business. Overall spreads are relatively tight but the supply and demand picture could remain favorable for a while. We keep focused on our specific stories.

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Change in NAV

Chart – Base 100 (22/02/2017)
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Performance

Performance C-EUR Cumulative performance Annualised performance
Since inception 16.21 %
Performance C-EUR Since 01/01/2017 1 Year 3 Year 5 year Since inception
Cumulative performance 16.21 %
Annualised performance


Fund information

Inception Date (Fund)
29/04/1998
Inception Date (Part)
24/06/2016
Legal form
SICAV
Benchmark
JP Morgan EMBI Global Hedged
Currency (fund)
EUR
Currency (share class)
EUR
Distribution Policy
Accumulation
Valuation frequency
Daily
Minimum initial investment
1 Share
ISIN Code
LU1160352438
AuM (fund)
395 M (EUR)
Regulatory authority
CSSF
EU Regulation
UCITS
Management company
Edmond de Rothschild Asset Management (Luxembourg)
Delegated Management Company
Edmond de Rothschild Asset Management (France)
Incorporation
Luxembourg
Maximum management fee
0,550 %
Current management fee
0.550 %
Subscription and redemption conditions
Daily before 12.30 am C.E.T. on day's net asset value
Subscription fee
3.00 % max
Performance fee
10,000 %

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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