Dear client,
The world is undergoing changes considered unthinkable only a few months ago, due to certain lightning-fast decisions adopted by the new US administration, which have infused financial markets with heightened unpredictability and uncertainty. This shift involves nothing short of reconfiguring the US’s political and commercial alliances with the rest of the world.
1. American “exceptionalism” and the EU’s “existential crisis”
As of today, we do not know which decisions the unpredictable White House resident will ultimately take. We do know that the unwavering sense of American “exceptionalism” that pervaded the annual meeting in Davos (Switzerland) a few months ago has given way to a less rosy picture of reality. Meanwhile, the “Old World”— immersed in an existential crisis, according to Christine Lagarde’s statements at the same meeting—is showing signs of awakening in several areas (energy, defence, industry) in the face of pressure from its traditional ally.
Increased political uncertainty means stock markets had a highly volatile first quarter, as illustrated by the indices represented in the graph below.
Stock market indices in 2025 (in euros)
Data obtained from Bloomberg
Date: 31/03/2025
2. Two major rotations
For a better understanding of recent developments, the markets’ Q1 movements can be categorised into two major rotations:
A. Global investors reducing their exposure to US stock markets and increasing exposure in Europe, sheepishly reversing underweighted positions.
B. US stock markets rotating away from tech companies toward other, more defensive segments, with contained valuations.
These developments once again reaffirm our misgivings about excessive unanimity among analysts and investors. Generally speaking, unanimity is a sign of imminent change. In fact, EDM’s global equity portfolios never held overweight positions on US equities, but rather remained on par with European-based global shares.
Strict monitoring of indices has led to the inclusion of up to 70% of US shares in equity portfolios, posing an excessive risk of concentration.
3. Will Europe bounce back?
It seems so. As anticipated in our Opinion Flash, pressure from the new US administration has resulted in what many observers, analysts, and politicians sought, i.e.: that the EU regain control of its future. This will not be an easy undertaking, however, given the tremendous political fragmentation that exists.
The most striking example is Germany, a key driver of the European economy, which is finally shaking off its budgetary limitations to launch a defence and infrastructure spending package.
4. Market nerves and changing sentiment
The immediate future of financial markets depends largely on US government debt, whose 10Y Bond is a pillar of the international financial system, serving as a proxy for risk-free investment.
At the moment, investors are cautiously examining the economic policy of the US government, which must offer sufficient guarantees to ensure that bondholders are not forced to serve as fiscal responsibility watchdogs for the world’s most prosperous economy. The potential impact of US protectionism creates an environment suited for possible measures aimed at softening yield hikes.
This is why, in our opinion, the potential risk associated with US Treasury bond fluctuations will be the biggest risk for markets in the coming quarters.
5. In the face of uncertainty, extreme caution
EDM’s portfolios continue to maintain neutral positioning with balanced exposure, which translates into an underweighting of US equities for the past two quarters and equity exposure in the lower range if the various risk profiles. This positioning provides us with the resources necessary in our portfolios to boost stock market exposure in the future as the market evolves.
The prudence-based policy will last as long as needed to dispel current uncertainties. It is, however, incompatible with capitalising on opportunities in a timely manner.
In the attached appendix, you will find the evolution of EDM’s investment funds in Q1 2025.
I would like to take this opportunity to thank you for your ongoing trust in us and, as ever, we continue to strive not to disappoint you.
Our warmest regards,
Carlos Llamas
CEO
APPENDIX
EDM funds at 31 March 2025
Past performance does not guarantee future results.
Source: EDM Gestión S.A. SGIIC
(*) Data obtained from the Spanish National Institute of Statistics (INE).
(1) Delegated management
For more detail of the various fund yields, see "Disclaimer".
LEGAL CONSIDERATIONS
1) This information is for advertising and information purposes only. It is not and cannot be considered investment advice or a legal opinion, is not intended to replace necessary investment advice and does not constitute an offer to sell or a request to buy.
2) All opinions and estimates provided are based on sources believed to be reliable. However, EDM Gestión, S.A., SGIIC cannot guarantee that these sources are accurate or complete, and assumes no liability whatsoever for any direct or indirect loss that may result from the use of the information provided in this document.
3) This information includes data referring to past performance of the products mentioned above. EDM Gestión, S.A., SGIIC warns that past performance is not a reliable indicator of future performance.
4) Investors should be aware that the products included in this document may not be suitable for their specific investment objectives, financial or equity position, or risk profile. Investors should therefore make their own decisions taking into account these circumstances and seek specialised tax, legal, financial, regulatory, accounting or other advice as necessary.
5) It is stated for the record that the instruments included in this information may be affected by various common causes such as:
- Market disruptions due to unforeseeable circumstances.
- Liquidity risks and other risks that alter the performance of the investment.
6) This documentation may include data based on currencies other than those used by the recipients of the documentation. Therefore, the possibility of any upward or downward change in the value of the currency and its impact on the results of the proposed products or instruments must be considered.
7) For each of the EDM Gestión, S.A., SGIIC Funds, a full prospectus, a key investor information document, periodic reports and the latest audited financial statements are available to the public and can be requested free of charge at the registered office of the Management Company or on the website www.edm.es.
8) EDM Gestión, S.A. SGIIC is a public company incorporated under Spanish law, registered in the Collective Investment Undertaking Management Companies Register of the Spanish National Securities Market Commission (CNMV) under number 49 and registered with the Commercial Registry of Madrid in volume 36,739, page 52, sheet M-658.326, with tax identification number A-58.217.175. It engages, among others, in the representation, management and administration of investment funds and investment firms domiciled in Spain and under Spanish law, and discretionary investment management.
DISCLAIMER
EDM Ahorro FI is an authorised investment fund regulated by the CNMV (registration no. 47) and managed by EDM Gestión, S.A., S.G.I.I.C. (CNMV registration no. 49). This is a fund under Article 8 of the SFDR. It is a fund with a risk profile of 2 on a scale of 1 to 7. Over the last five years, Class L obtained the following annual returns: 2019: 4.78%; 2020: 0.38%; 2021: 1.58%; 2022: -4.08%; 2023: 5.34%.
EDM Renta FI is an authorised investment fund regulated by the CNMV (registration no. 530) and managed by EDM Gestión, S.A., S.G.I.I.C. (CNMV registration no. 49). It is a fund with a risk profile of 1 on a scale of 1 to 7. Over the last five years, Class L obtained the following annual returns: 2019: 0.61%; 2020: -0.3%; 2021: -0.11%; 2022: 0.07%; 2023: 3.20%.
EDM Credit Portfolio is a sub-fund of EDM International SICAV authorised in Luxembourg and regulated by the Commission de Surveillance du Secteur Financier (CSSF) (registration no. 851). The Management Company is Waystone Management Company (Lux), S.A., which is subject to oversight by CSSF. The sub-fund is managed and marketed in Spain by EDM Gestión, S.A., S.G.I.I.C. (CNMV registration no. 49). This is a sub-fund under Article 8 of the SFDR. It is a fund with a risk profile of 3 on a scale of 1 to 7. Since the inception of Class L on 19/01/2021 and until 31/12/2023, it obtained the following annual returns: 2022: -14.66%; 2023: 8.85%.
EDM Renta Fija Horizonte 5 años FI is an investment fund authorised and regulated by the National Securities Market Commission (CNMV) (registration number 5806) and managed by EDM Gestión S.A., S.G.I.I.C. (CNMV registration number 49). It is a fund with a risk profile of 2 on a scale of 1 to 7. Since its launch on 6/10/2023, there are no complete periods to report on its annual profitability.
Fixed-income investments made by the fund would incur losses if interest rates rise, so redemptions made before maturity may entail losses for the investor.
Any redemption made before maturity will bear a 3% commission, unless it is ordered on any of the 9 specifically provided dates: 20/06 and 20/12 of 2024; 20/06 and 20/12 of 2025; 20/06 and 20/12 of 2026; 20/06 and 20/12 of 2027 and 20/06/2028 or the next business day, respectively.
Please note that the estimated return of the fund does not protect investors from the effect of inflation during the period until maturity, so the actual return (i.e. discounted for inflation) could be lower or even negative.
EDM Renta Fija Horizonte 2.5 años, FI: Investment fund managed by EDM Gestión S.A., S.G.I.I.C. and registered with the CNMV under number 5867. It is a euro fixed-income category fund with a risk profile of 2 on a scale of 1 to 7. Since its launch on 05/17/2024, there are no complete periods to report on its annual profitability.
EDM Cartera FI is an authorised investment fund regulated by the CNMV (registration no. 4043) and managed by EDM Gestión, S.A., S.G.I.I.C. (CNMV registration no. 49). This is a fund under Article 8 of the SFDR. It is a fund with a risk profile of 3 on a scale of 1 to 7. Over the last five years, Class L obtained the following annual returns: 2019: 16.12%; 2020: 3.87%; 2021: 12.98%; 2022: -16.28%; 2023: 17.51%.
EDM Renta Variable Internacional FI is an investment fund authorised and regulated by the National Securities Market Commission (CNMV) (registration no. 4604) and managed by EDM Gestión S.A., S.G.I.I.C. (CNMV registration no. 49). It is a fund with a risk profile of 4 on a scale of 1 to 7. Over the last five years, the L class has obtained the following annual returns: 2019: 29.20%; 2020: 8.03%; 2021: 28.38%; 2022: -23.00%; 2023: 28.47%.
EDM Inversión/Spanish Equity Fund is a sub-fund of EDM International SICAV authorised in Luxembourg and regulated by the CSSF (registration no. 851). The Management Company is Waystone Management Company (Lux), S.A., which is subject to oversight by CSSF. The sub-fund is managed and marketed in Spain by EDM Gestión, S.A., S.G.I.I.C. (CNMV registration no. 49). This is a sub-fund under Article 8 of the SFDR. It is a fund with a risk profile of 5 on a scale of 1 to 7. Over the last five years, Class L obtained the following annual returns: 2019: 12.36%; 2020: -10.18%; 2021: 14.52%; 2022: -12.69%; 2023: 17.28%.
EDM Strategy Fund is a sub-fund of EDM International SICAV authorised in Luxembourg and regulated by the CSSF (registration no. 851). The Management Company is Waystone Management Company (Lux), S.A., which is subject to oversight by CSSF. The sub-fund is managed and marketed in Spain by EDM Gestión, S.A., S.G.I.I.C. (CNMV registration no. 49). This is a sub-fund under Article 8 of the SFDR. It is a fund with a risk profile of 4 on a scale of 1 to 7. Over the last five years, Class L obtained the following annual returns: 2019: 30.42%; 2020: 0.28%; 2021: 29.23%; 2022: -17.81%; 2023: 26.01%.
EDM Global Equity Impact Fund is a sub-fund of EDM International SICAV authorised in Luxembourg and regulated by the CSSF (registration no. 851). The Management Company is Waystone Management Company (Lux), S.A., which is subject to oversight by CSSF. The sub-fund is managed and marketed in Spain by EDM Gestión, S.A., S.G.I.I.C. (CNMV registration no. 49). This is a sub-fund under Article 8 of the SFDR. It is a fund with a risk profile of 4 on a scale of 1 to 7. Since its launch on 30/05/2022 and until 31/12/2023, Class L obtained the following annual returns: 2023: 21.24%.
EDM American Growth Fund is a sub-fund of EDM International SICAV authorised in Luxembourg and regulated by the CSSF (registration no. 851). The Management Company is Waystone Management Company (Lux), S.A., which is subject to oversight by CSSF. The sub-fund is managed and marketed in Spain by EDM Gestión, S.A., S.G.I.I.C. (CNMV registration no. 49). This is a sub-fund under Article 8 of the SFDR. It is a fund with a risk profile of 5 on a scale of 1 to 7. Since the inception of Class L on 18/01/2021 and until 31/12/2023, it obtained the following annual returns: 2022: -43.38%; 2023: 34.92%.
EDM Latin American Equity Fund is a sub-fund of EDM International SICAV authorised in Luxembourg and regulated by the CSSF (registration no. 851). The Management Company is Waystone Management Company (Lux), S.A., which is subject to oversight by CSSF. The sub-fund is managed and marketed in Spain by EDM Gestión, S.A., S.G.I.I.C. (CNMV registration no. 49). This is a sub-fund under Article 8 of the SFDR. It is a fund with a risk profile of 5 on a scale of 1 to 7. Over the last five years, Class L obtained the following annual returns: 2019: 22.32%; 2020: -28.51%; 2021: -19.03%; 2022: 11.17%; 2023: 24.91%.
EDM International Equities FI is an authorised investment fund regulated by the CNMV (registration no. 2817) and managed by EDM Gestión, S.A., S.G.I.I.C. (CNMV registration no. 49). This is a fund under Article 8 of the SFDR. It is a fund with a risk profile of 4 on a scale of 1 to 7. Over the last five years, Class L obtained the following annual returns: 2019: 6.68%; 2020: 1.95%; 2021: 5.07%; 2022: -14.98%; 2023: 24.40%. There were significant changes in policy in 2022. The data prior to 2022 are not representative under the current investment policy.
EDM Pointer SA SIL is an authorised hedge fund regulated by the CNMV (registration no. 26) and managed by EDM Gestión, S.A., S.G.I.I.C. (CNMV registration no. 49). It is a fund with a risk profile of 4 on a scale of 1 to 7. Since its launch on 26/11/2021 and until 31/12/2023, Class A obtained the following annual returns: 2022: -7.96% and 2023: 13.16%.
EDM High Yield Short Duration is a sub-fund of EDM International SICAV authorised in Luxembourg and regulated by the Commission de Surveillance du Secteur Financier (CSSF) (registration no. 851). The Management Company is Waystone Management Company (Lux) S.A subject to the supervision of the CSSF. The sub-fund is managed and marketed in Spain by EDM Gestión S.A., S.G.I.I.C. (CNMV registration no. 49). This is an art. 8 SFDR sub-fund. It is a fund with a risk profile of 2 on a scale of 1 to 7. Since the creation of class L on 08/01/2021 and until 31/12/2023, it has obtained the following annual returns: 2022: -7.18%; 2023: 5.35%.
Fondomutua Pensions UNO, FP is an authorised pension fund regulated by the Directorate General of Insurance and Pension Funds (DGSFP) (registration no. F2154). Mutuactivos Pensiones, S.A.U., S.G.F.P. (DGSFP registration no. G0135) is the Fund Manager and EDM Gestión, S.A., SGIIC (CNMV registration no. 49) is the Delegated Manager and Promoter of the EDM PENSIONES RENTA FIJA Pension Plan, P.P., assigned to the fund. It is a fund with a risk profile of 2 on a scale of 1 to 7. Over the last five years, it obtained the following annual returns: 2019: 3.79%; 2020: -0.67%; 2021: 1.57%; 2022: -8.16%; 2023: 4.44%.
Fondomutua Pensions DOS, FP is an authorised pension fund regulated by the Directorate General of Insurance and Pension Funds (DGSFP) (registration no. F2155). Mutuactivos Pensiones, S.A.U., S.G.F.P. (DGSFP registration no. G0135) is the Fund Manager and EDM Gestión, S.A., SGIIC (CNMV registration no. 49) is the Delegated Manager and Promoter of the EDM PENSIONES RENTA VARIABLE Pension Plan, P.P., assigned to the fund. It is a fund with a risk profile of 4 on a scale of 1 to 7. Over the last five years, it obtained the following annual returns: 2019: 23.67%; 2020: 5.66%; 2021: 22.05%; 2022: -20.56%; 2023: 29.98%.
