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EdR Fund Emerging Bonds Emerging bonds

Emerging bonds
Change in NAV (17/08/2017)
109.53 USD
Jean-Jacques  DURAND–LU1225424594–
Jean-Jacques DURAND
Romain BORDENAVE–LU1225424594–
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
109.53 USD
Change in NAV (17/08/2017)
5
1234567
Risk and reward profile
> 3 years
Recommended holding period
Change in NAV (17/08/2017)
109.53 USD
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.
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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 31/07/2017

Still driven by flows, EM Debt markets had a decent performance in July with hard currency debt up +0.51% (EMBI Global hedged in EUR) and local currency debt up +2.07% (GBI-EM index). With -2.75% (I share) our fund EdR Emerging Bonds underperformed mostly on volatility in Venezuela. Indeed, we mainly suffered from our Venezuela exposure where bonds prices tumbled on the fear that new US sanctions targeted at oil exports could push, faster than expected, the country in default. A contested and fraudulent vote was maintained in order to elect a constituent assembly with the task of rewriting the constitution. As a result the US eventually enacted targeted sanctions against some former and current members of the government including Nicolas Maduro himself. This further radicalization, after months of protests and many deaths is the mark of an ever more isolated and weaker regime and could be seen as a move to amass bargaining chips for later negotiations. One thing for sure is that events could accelerate in the coming weeks. With our bonds holdings in the 30-42 price range we see us halfway in our worst case default scenario in terms of price impact on the fund. We are still strongly convinced by the long term prospects of this position default or no default on the way. However, we benefited from our Ukraine position. With better growth prospects, there has been strong demand for GDP linked warrants which have seen their price increase by +50% over the past 4 months. With 6.5% within the fund, it was our main performer. EM currencies had a strong month on the back of a weak US dollar pressured by the Trump administration's latest struggles. We have used this opportunity to take part of our profits on the MXN after it touched the 17.5 level. Our local exposure in Mexico is now focused on local bonds. Globally, flows continue to flood our asset class with YtD inflows close to $68.5bn split between $40.1bn in hard currency and $28.3bn in local. This demand is still pushing prices higher and a record amount of new issues is often largely oversubscribed. This exuberance with poor valuations and more stretched positioning keep us cautious with plenty of cash to be opportunistic when the trend subsides.

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Change in NAV

Chart – Base 100 (17/08/2017)
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Performance I-USD Cumulative Annualised

Since inception

9.53 %

17.26 %

Since 01/01/2017 1 Year 3 Year 5 year Since inception
Cumulative

Share class (I-USD)

Benchmark

9.53 %

17.26 %

Annualised

Share class (I-USD)

Benchmark

*Rolling periods

Annual performance



Fund information

Inception Date (Fund)
29/04/1998
Inception Date (Part)
19/12/2016
Legal form
SICAV
Benchmark
JP Morgan EMBI Global (USD)
Currency (fund)
EUR
Currency (share class)
USD
Distribution Policy
Accumulation
Valuation frequency
Daily
Minimum initial investment
500000.00 USD EQ EUR
ISIN Code
LU1225424594
AuM (fund)
500 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
0,400 %
Current management fee
0.400 %
Subscription and redemption conditions
Daily before 12.30 am C.E.T. on day's net asset value
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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