EdRAM picks ‘best of best’ for Convictions fund
Edmond de Rothschild Asset Management is known for its active, concentrated portfolios, and the firm’s new Euro Convictions fund further backs the best ideas from other strategies.
As high conviction stockpickers and specialists in convertibles and thematic funds, Edmond de Rothschild Asset Management (EdRAM) is a firm for truly sophisticated investors who are confident in their ability to weather uncertain markets and identify investment themes before they become commonplace.
The Paris-based firm’s structure reflects the fund strategies and styles – 39 portfolio managers and analysts are organised in seven teams by asset class, investment region or style.
They are supported by an economic and financial research team as well as a product specialist. On average, the investment managers have 14 years of market experience.
Of a total of €12.4bn assets under management at end December 2011, EdRAM has €4.9bn in European equities through four established European strategies: Edmond de Rothschild Europe Synergy, Edmond de Rothschild Europe Value & Yield, Edmond de Rothschild Selective Europe and Edmond de Rothschild Euro Leaders.
A new addition
The latest addition to this range is the Euro Convictions fund, managed by Olivier Huet, who is also a co-manager of the Europe Synergy fund. Launched last December in France, it was offered to the UK market in February. The co-manager is Philippe Lecoq.
Huet describes the long-only €130m fund’s investment process as “stock picking for optimised efficiency”. It comprises the European equity team’s strongest eurozone conviction picks, which have already been subjected to a rigorous selection procedure through the other strategies.
The aim is to include the stocks benefiting from the investment themes and trends that stand the best chance of outperforming the market at each stage in an economic cycle. For example, he says, strategies with a stronger bias towards yield stocks do better when markets fall. 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.
From as universe of 80 to 100 names, already filtered through the other European funds, the Euro convictions portfolio holds about 30 to 50 stocks. They are selected first on the basis of company fundamentals, valuation levels and potential upside, before a qualitative review of the macroeconomic and stock market environment.
At the same time, positions are tactically adjusted to optimise the portfolio’s risk/return profile.