Thus far in 2024 financial markets have evolved favourably overall, with mixed results for bonds and record highs for the main equity markets. Corporate credit is performing relatively well, with narrowing risk premiums, especially among high-yield categories. By contrast, sovereign bonds remain volatile, fluctuating up and down and closing the first five months of the year in negative territory.
At the last Fed meeting in early May, coupled with a less restrictive-than-expected message from Chairman Powell, data was released showing an easing of inflation in the US, which caused interest rates to fall and renewed hopes of a soft landing. In the second half of the month, however, several countries published inflation and activity data that was stronger than anticipated, prompting expectations of higher rates for longer and an uptick in sovereign interest rates.
In this environment, we have launched a new fund, EDM Renta Fija Horizonte 2.5 años FI, augmenting the company’s range of corporate bond funds. This is a mostly private, euro bond fund maturing on 30 November 2026.
The fund invests in assets with an average initial credit rating of investment-grade (at least BBB-), mainly from OECD issuers. The portfolio will invest roughly 25% in subordinated debt and another 25% in high-yield assets. The maximum exposure to currency risk is 10%.
The investment team at EDM Gestión SGIIC SA selects the fund’s assets after a detailed analysis of fundamentals. The portfolio is highly diversified across 15 sectors, including more than 70 companies, many of which are global leaders.
This is an accumulation class of fund wherein the returns obtained are re-invested. There are two class types, depending on the end-client. The new fund targets clients who can maintain the investment for a time horizon of 2.5 years (fund maturity: 30 November 2026) with a risk profile of two on a scale of 1-7.
We have established a sales period that expires on 25 July 2024. From that date until the fund matures, discounts will be applied to the fund for subscriptions and redemptions, except during liquidity windows, which will be quarterly.
The fund is suitable for clients with a conservative investment profile and we believe it is a good opportunity to obtain attractive returns by the end of 2026. This aspect is important given that the portfolio should benefit from impending rate cuts by the European Central Bank, which we expect in the coming quarters.
Ricardo Vidal
Chief Investment Officer
DISCLAIMER
All the opinions and estimates provided are based on sources considered reliable. Nevertheless, EDM Gestión, SA, SGIIC cannot guarantee their accuracy or integrity, nor does it assume liability for any direct or indirect loss that may result from the use of the information provided in this document.
The content of this document is intended for advertising and informational purposes only. It is not and cannot be considered investment advice or legal opinion, nor is it intended to substitute the necessary counsel in this regard or constitute an offer to sell or buy. EDM Gestión, SA, SGIIC advises that past performance is not a reliable indicator of future returns.
EDM Gestión, SA, SGIIC is a Management Company registered with the CNMV under number 49, with registered offices at Paseo de la Castellana 78, 28046 Madrid.
Available to the public for each EDM Gestión, SA, SGIIC fund are the complete prospectus, the Key Investor Information document, periodic reports, and the most recent audited financial statements, which can be requested free of charge at the address of the Management Company or from the corporate website www.edm.es.
Investors should be aware that the products included in this document may not be suitable given their specific investment goals, financial position, net worth, or risk profile. Investors must make their own decisions, taking into account these circumstances and seeking the specialised tax, legal, financial, regulatory, accounting, or other advice necessary. Past performance does not guarantee future returns. The value and performance of your investment can go down as well as up.
EDM Renta Fija Horizonte 2,5 años, FI: a euro fixed-income category investment fund registered with the CNMV as number 5867. Since its launch on 17/05/2024, no complete periods have elapsed in which to report on profitability.
LEGAL CONSIDERATIONS
1) This information, which constitutes EDM advertising, is intended for informational purposes only in accordance with the rules of conduct applicable to investment services in Spain, and is therefore sufficient and understandable for any potential recipient. The information may refer to or entail additional, separate documentation, which you may request from EDM. If this information contains offers of products, financial instruments, or services, recipients may avail themselves to any complementary or additional documentation that enables them to comply with the terms and conditions of the offer in question.
2) EDM Gestión, S.A. SGIIC is a limited liability company under Spanish law registered in the CNMV’s Special Registry of Collective Investment Scheme Management Companies (Registro Especial de Sociedades Gestoras de Instituciones de Inversión Colectiva) no. 49, and in the Commercial Registry of Madrid, under volume 36,739, sheet 52, page M-658.326, with tax identification no.: A-58.217.175. Its activity includes the representation, management, and administration of Funds and Investment Companies located in Spain and subject to Spanish law, in addition to discretionary portfolio management.
3) Recipients of this information must take into account the fact that any result or data provided may be subject to fees, commissions, taxes, and expenses, which may decrease or alter the gross result, depending on the nature of each case.
4) The instruments included in this information are subject to the potential effects of several common causes, including:
. Market fluctuations due to unforeseen circumstances.
. Liquidity risk and other risks that alter the evolution of the investment.
5) This information contains data that reflect the past performance of the cited products. The data is a reference or record used to reach a conclusion, but is in no way an indisputable indicator of future performance.
6) This documentation may contain data based on currencies foreign to the recipient. Therefore, the possibility of an upward or downward fluctuation in the value of the currency and its effect on the results of the proposed product or instrument should be taken into account.
7) To ensure discretionary portfolio management services are provided within the scope of suitability, MiFID regulations require EDM to collect the necessary information regarding its clients’ investment goals, financial capacity, and investment experience and knowledge. To that end, EDM will obtain the information needed to create an investment profile of each client, consistent with their particular circumstances. Regulation does not permit EDM to render discretionary portfolio management services without the information necessary to assess the suitability of its clients
8) To obtain the mandatory legal information, please visit the website of the management company, EDM Gestión SA SGIIC, at www.edm.es. You may also obtain a hard copy of this information upon request, free of charge.
9) All the opinions and estimates provided are based on sources considered reliable. Nevertheless, EDM Gestión, SA, SGIIC cannot guarantee their accuracy or integrity, and does not assume liability for any direct or indirect loss that may result from the use of the information provided in this document.
10) The content of this document is intended for informational and advertising purposes only. It is not and cannot be considered investment advice or legal opinion, nor is it intended to substitute the necessary counsel in this regard or constitute an offer to sell or buy. EDM Gestión, SA, SGIIC advises that past returns are not a reliable indicator of future profitability.
