Dear investor,
The opening days of this year have seen a deluge of forecasts for what 2026 may hold in store, for both politics and economics and for the financial markets. I must make clear that it is my personal conviction, and that of EDM, that the future is, as always, uncertain, and furthermore that the way markets will respond in the short term cannot be foreseen, as they mainly depend on the ever changing mindset of investors.
THE NEW KINGS OF THE MARKET: RETAIL INVESTORS
In 2025, many investors turned-amateur speculators ignored certain economists’ warnings of the possible implications of changes in the global order. And they leapt into investments based on uncertain expectations regarding the expected benefits of artificial intelligence (AI).
Market indexes have thus been catapulted by a small number of companies. We believe the resulting concentration is one of the greatest risks now at the start of 2026. Even Europe has seen a staggering concentration in shares in banks, which represent the majority of the gains in the Stoxx 600, and of course in Spain's Ibex-35 as well. The fact that the markets’ 2025 fortunes were basically based on these concentrations can be seen in Figure 1.
THE US DOLLAR: ANOTHER DETERMINING FACTOR FOR 2025 PERFORMANCE
Another determining factor from last year was the parity of the USD, which plummeted especially versus the EUR (-11.7%). This factor had a notable impact on investments that are made in USD but valued in EUR.
Based on its past experience, EDM’s foreign exchange policy has been to disregard fluctuations in exchange rates, as it has historically found that their impact on returns for investors is minimal, since exchange rates tend toward equilibrium in the long term (see Figure 2).
In 2025, the USD’s decline versus the EUR weighed decisively on the results of portfolios that lack exchange rate hedges. In fact, the MSCI AC World denominated in EUR only yielded 6.3% at the close of 2025.
EDM’S ASSET MANAGEMENT
Table 1 shows the results of EDM's main investment funds in 2025, and the last 3 and 5 years versus inflation.
The comparison of the results versus inflation is intentional. Our book The Investing Trade [El Oficio de Invertir], published by EDM in 2024, illustrates how we approach asset management by insisting that investors’ goals are twofold:
- Preserving their capital in real terms (i.e., protecting it from inflation); and…
- ...beating inflation by multiple percentage points, which will vary based on their risk profile and their profit expectations.
This approach not only forces us to keep our investments profitable, but also to do so in proportion to the risks each investor is willing to take on.
2026: THREE THREATS
Over the course of 2025, our clients were not immune to the general worries in the political and economic spheres.
A) The new world order: Distrust
There is no need to reiterate that 2025 upended the international order that had ruled the world for the past 60 years. The new order is fostering the appearing of geographic spheres of influence, imposed in many cases by force. The events just a few days ago in Venezuela are a case in point.
This is in addition to the authoritarian turn being taken in many countries, most importantly in the US. It is not for us to provide moral or strategic judgements on what is going on, but the consequence of this geopolitical upheaval is that trust has been lost in the US dollar, which until now has been the global reference currency both for world trade and for the international financial system. The corollary has been a flight to gold, whose price has sky-rocketed.
B) The deterioration of public finances
The long trend toward increasing debt-to-GDP ratios in all countries has led many to expect a rebellion from “bond vigilantes” due to the loss of fiscal discipline, in which they would force governments to adopt unpopular measures. The French Government’s difficulties righting its heavily debt-laden ship is one recent case. This trend is shown in Figure 3:
C) The stock market: concentration and bubbles
The questions heard most often over the course of 2025 were: Are stocks overpriced? Are we in a bubble?
Technically, a bubble occurs when stock prices are well above the present value of future returns. Comparing the current P/E ratios with those from the last telecoms and dotcom bubble in 2000, it is debatable whether we are currently in a bubble (see Table 2).
Of course, bubbles are only truly detected once they have burst, so it is hard to see them while in the thick of it, where there is generally euphoria surrounding technological revolutions (AI).
Nevertheless, since share prices are currently high, as can be seen in Figure 4, they are vulnerable to any change in investor sentiment.
2026: THREE OPPORTUNITIES
Our vision for 2026 is part of our famous “sceptical optimism” that we constantly discuss in our Investor Forums.
A) Stock markets: not every stock makes the indexes
The rising popularity of investment in index funds (already dominant in the US and growing in Europe) disregards valuing each company individually, even though this is crucial for those who, like EDM, select investments based on each investor’s profit expectations and their current assessment.
Sure, stock market indexes are at historical highs, but many companies are a bargain! These are the majority of what we call “quality growth” companies that can be had at reasonable prices or some even for a song. Figure 5 shows that their P/E ratios are below their historical average.
B) Where to invest in fixed income
The government debt spree underway in many countries cannot go on forever. Conceptually, there are five alternatives for redirecting the excess debt:
- Strong economic growth... in excess of interest rates
- Austerity in public spending
- Raising taxes
- Formal or technical default
- Inflation
We suspect that the option governments will prefer is the last. As is well known, inflation favours debtors and harms creditors (bondholders), which makes it a more attractive way to default. That is why governments fall into the temptation of pressuring their central banks to keep bond yields below the level required by their overspending (“financial repression”).
Faced with this risk, and as long as it does not materialise, EDM will continue to concentrate its fixed-income investments in short-term bonds from top quality issuers, basically private companies. If this risk mentioned above becomes a reality, we will leap on the opportunity to extend maturities and make incursions into high-yield bonds that can offer long-term contractual terms similar to those of stocks.
C) Diversification assets
The diversification assets portfolio will start to include investments in infrastructure projects that generate stable, predictable returns over the long term, since the phenomenal investments the world needs already offer fertile ground for private investments.
Under this heading, we will also have gold as a solid candidate for more sceptical investors, as it is the refuge asset for those who distrust the value of currencies and governments’ fiscal rigour. Some believe that Bitcoin will serve this same purpose, but its speculative nature became clear in 2025.
Finally, I would like to thank you sincerely for the trust you place in EDM, which we always endeavour to repay.
Warm regards and best wishes for 2026,
Carlos Llamas
CEO
LEGAL NOTICE
1) The preceding information is provided for promotional and information purposes only. It is not, and is not to be taken as, investment or legal advice; is not intended to take the place of necessary investment advice; and is neither an offer to sell nor solicitation of an offer to buy.
2) All the views and forecasts expressed are based on what are believed to be reliable sources. Nevertheless, EDM Gestión, SAU, SGIIC cannot guarantee their accuracy or completeness and takes no liability for any direct or indirect losses ensuing from using the information provided here.
3) This information includes data that refer to the past performance of the products discussed. EDM Gestión, SAU, SGIIC cautions 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, their financial or asset position, or their risk profile. Investors should therefore take their own investment decisions with these circumstances taken into account, and should seek specialised tax, legal, financial, regulatory and accounting advice, along with any other advice they may need.
5) It should be noted that the instruments covered by this information are subject to possible effects due to various common causes such as:
- Market disruptions due to unforeseeable circumstances.
- Liquidity and other risks that may alter investment their performance.
6) This documentation may contain data based on currencies other than those used by the recipients of the documentation. Therefore, consideration should be given to the possibility of any upward or downward change in the value of the currency and its impact on the performance of the proposed products or instruments.
7) For each Fund of EDM Gestión, SAU, SGIIC, the public may access the full prospectus, the key investor information document (KIID), periodical reports and that last audited notes to the financial statements, which may be requested free of charge from the Management Company’s registered office or at www.edm.es.
8) EDM Gestión, SAU, SGIIC is a Spanish public limited company with tax identification number A58217175, registered on the Spanish National Securities Market Commission's Special Register of Collective Investment Scheme Management Companies under number 49 and at the Companies Registry of Madrid in volume 36739, page 52, sheet M-658326 and tax identification number: A-58217175. Its activities include discretionary portfolio management and representing, managing, and administering funds and investment companies incorporated and located in Spain.
DISCLAIMERS
EDM Ahorro FI is an investment fund authorised and regulated by the Spanish National Securities Market Commission (CNMV) (registration no. 47) and managed by EDM Gestión S.A.U., S.G.I.I.C. (CNMV registration no. 49). It is an Article 8 SFDR fund. It is a fund with a risk profile of 2 on a scale of 1 to 7. Over the last five years, its L class has achieved the following annual return: 2021: 1.58%; 2022: -4.08%; 2023: 5.34%; 2024: 3.31%; 2025: 2.98%.
EDM Renta FI is an investment fund authorised and regulated by the Spanish National Securities Market Commission (CNMV) (registration no. 530) and managed by EDM Gestión S.A.U., 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, its L class has achieved the following annual return: 2021: -0.11%; 2022: 0.07%; 2023: 3.20%; 2024: 3.97%; 2025: 2.59%.
EDM International - 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. subject to the supervision of CSSF. The Sub-Fund is managed and marketed in Spain by EDM Gestión S.A.U., S.G.I.I.C. (CNMV registration no. 49). It is an Article 8 SFDR sub-fund. It is a fund with a risk profile of 3 on a scale of 1 to 7. From the creation of Class L on 19/01/2021 to 31/12/2024, it achieved the following annual performance: 2022: -14.66%; 2023: 8.85%; 2024: 5.34%; 2025: 5.14%.
EDM Renta Fija Horizonte 5 años FI is an investment fund authorised and regulated by the Spanish National Securities Market Commission (CNMV) (registration no. 5806) and managed by EDM Gestión S.A.U., S.G.I.I.C. (CNMV registration no. 49). It is a fund with a risk profile of 2 on a scale of 1 to 7. From its creation on 6/10/2023 to 31/12/2024, the L class achieved the following annual performance: 2024: 4.91%; 2025: 4.25%.
Fixed income investments made by the fund may incur losses if interest rates rise, so redemptions made before maturity may result in losses to the investor.
Any redemption prior to maturity will be subject to a 3% fee, unless ordered on one of the 9 dates specifically foreseen: 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 performance of the fund does not protect investors from the effect of inflation over the period to maturity and therefore the actual performance (i.e. discounting inflation) could be lower or even negative.
EDM Horizonte 3 años FI is an investment fund authorised and regulated by the Spanish National Securities Market Commission (CNMV) (registration no. 5879) and managed by EDM Gestión S.A.U., S.G.I.I.C. (CNMV registration no. 49). It is an Article 8 SFDR fund. It is a fund with a risk profile of 2 on a scale of 1 to 7. From its creation on 21/06/2024, the L class achieved the following annual performance: 2024: 3.74%; 2025: 3.84%.
Fixed income investments made by the fund may incur losses if interest rates rise, so redemptions made before maturity may result in losses to the investor.
Any redemption prior to maturity will be subject to a 3% fee, unless ordered on one of the 11 dates specifically foreseen: 31/10/2024, 31/01, 30/04, 31/07 and 31/10/2025; 31/01, 30/04, 31/07 and 31/10/2026; 31/01 and 30/04/2027 or the next business day, respectively.
Please note that the estimated performance of the fund does not protect investors from the effect of inflation over the period to maturity and therefore the actual performance (i.e. discounting inflation) could be lower or even negative.
EDM Renta Fija Horizonte 2.5 años FI is an investment fund authorised and regulated by the Spanish National Securities Market Commission (CNMV) (registration no. 5867) and managed by EDM Gestión S.A.U., S.G.I.I.C. (CNMV registration no. 49). It is an Article 8 SFDR fund. It is a fund with a risk profile of 2 on a scale of 1 to 7. From its creation on 17/05/2024, the L class achieved the following annual performance: 2024: 3.81%; 2025: 3.29%.
Fixed income investments made by the fund may incur losses if interest rates rise, so redemptions made before maturity may result in losses to the investor.
Any redemption prior to maturity will be subject to a 3% fee, unless ordered on one of the 8 dates specifically foreseen: 15/10/2024, 15/01, 15/04, 15/07 and 15/10 2025; 15/01, 15/04 and 15/07 2026 or the next business day, respectively.
Please note that the estimated performance of the fund does not protect investors from the effect of inflation over the period to maturity and therefore the actual performance (i.e. discounting inflation) could be lower or even negative.
EDM Horizonte 2026, FI is an investment fund authorised and regulated by the Spanish National Securities Market Commission (CNMV) (registration no. 5815) and managed by EDM Gestión S.A.U., S.G.I.I.C. (CNMV registration no. 49). It is a fund with a risk profile of 2 on a scale of 1 to 7. From its creation on 3/11/2023 to 31/12/2024, it achieved the following annual performance: 2024: 4.09%; 2025: -1.84%.
Fixed income investments made by the fund may incur losses if interest rates rise, so redemptions made before maturity may result in losses to the investor.
Any redemption prior to maturity will be subject to a 3% fee, unless ordered on one of the 4 dates specifically foreseen: 15/06 and 15/12/2024; 15/06 and 15/12/2025 or the next business day, respectively.
Please note that the estimated performance of the fund does not protect investors from the effect of inflation over the period to maturity and therefore the actual performance (i.e. discounting inflation) could be lower or even negative.
EDM Cartera FI is an investment fund authorised and regulated by the Spanish National Securities Market Commission (CNMV) (registration no. 4043) and managed by EDM Gestión S.A.U., S.G.I.I.C. (CNMV registration no. 49). It is an Article 8 SFDR fund. It is a fund with a risk profile of 3 on a scale of 1 to 7. Over the last five years, its L class has achieved the following annual return: 2021: 12.98%; 2022: -16.28%; 2023: 17.51%; 2024: 7.47%; 2025: 3.67%.
EDM Renta Variable Internacional FI is an investment fund authorised and regulated by the Spanish National Securities Market Commission (CNMV) (registration no. 4604) and managed by EDM Gestión S.A.U., 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, its L class has achieved the following annual return: 2021: 28.38%; 2022: -23.00%; 2023: 28.47%; 2024: 13.52%; 2025: 0.45%.
EDM International - Inversión/Spanish Equity 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 CSSF. The Sub-Fund is managed and marketed in Spain by EDM Gestión S.A.U., S.G.I.I.C. (CNMV registration no. 49). It is an Article 8 SFDR sub-fund. It is a fund with a risk profile of 5 on a scale of 1 to 7. Over the last five years, its L class has achieved the following annual return: 2021: 14.52%; 2022: -13.19%; 2023: 17.28%; 2024: 3.72%; 2025: 31.37%.
EDM International - Strategy Fund 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 CSSF. The Sub-Fund is managed and marketed in Spain by EDM Gestión S.A.U., S.G.I.I.C. (CNMV registration no. 49). It is an Article 8 SFDR sub-fund. It is a fund with a risk profile of 4 on a scale of 1 to 7. Over the last five years, its L class has achieved the following annual return: 2021: 29.23%; 2022: -17.81%; 2023: 26.01%; 2024: 8.58%; 2025: 8.56%.
EDM International – Sustainable Global Equity Fund 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 CSSF. The sub-fund is managed and marketed in Spain by EDM Gestión S.A.U, S.G.I.I.C. (CNMV registration no. 49). It is an Article 8 SFDR sub-fund. It is a fund with a risk profile of 4 on a scale of 1 to 7. From its creation on 30/05/2022 to 31/12/2024, the L class achieved the following annual performance: 2023: 21.24%; 2024: 11.78%; 2025: -1.95%.
EDM International - American Growth 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 CSSF. The sub-fund is managed and marketed in Spain by EDM Gestión S.A.U, S.G.I.I.C. (CNMV registration no. 49). It is an Article 8 SFDR sub-fund. It is a fund with a risk profile of 5 on a scale of 1 to 7. From the creation of Class L on 18/01/2021 to 31/12/2024, it achieved the following annual performance: 2022: -43.38%; 2023: 34.92%; 2024: 15.43%; 2025: 3.08%.
EDM International - Latin American Equity Fund 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 CSSF. The Sub-Fund is managed and marketed in Spain by EDM Gestión S.A.U., S.G.I.I.C. (CNMV registration no. 49). It is an Article 8 SFDR sub-fund. It is a fund with a risk profile of 5 on a scale of 1 to 7. Over the last five years, its L class has achieved the following annual return: 2021: -19.03%; 2022: 11.17%; 2023: 24.91%; 2024: -16.49%; 2025: 33.61%.
EDM International Equities FI is an investment fund authorised and regulated by the Spanish National Securities Market Commission (CNMV) (registration no. 2817) and managed by EDM Gestión S.A.U., S.G.I.I.C. (CNMV registration no. 49). It is an Article 8 SFDR fund. It is a fund with a risk profile of 4 on a scale of 1 to 7. Over the last five years, its L class has achieved the following annual return: 2021: 5.07%; 2022: -14.98%; 2023: 24.40%; 2024: 13.28%; 2025: -0.85%. Major changes were made to the policy in 2022. The data from before 2022 are not representative under the current investment policy.
EDM Pointer SA SIL is a Spanish unrestricted alternative investment fund (IICIL) authorised and regulated by the Spanish National Securities Market Commission (CNMV) (registration no. 26) and managed by EDM Gestión S.A.U., 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. From its creation on 26/11/2021 to 31/12/2024, the L class achieved the following annual performance: 2022: -7.96%; 2023: 13.16%; 2024: 0.24%; 2025: 6.91%.
EDM International - 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 CSSF. The Sub-Fund is managed and marketed in Spain by EDM Gestión S.A.U., S.G.I.I.C. (CNMV registration no. 49). It is an Article 8 SFDR sub-fund. It is a fund with a risk profile of 2 on a scale of 1 to 7. From the creation of Class L on 08/01/2021 to 31/12/2024, it achieved the following annual performance: 2022: -7.18%; 2023: 5.35%; 2024: 4.45%; 2025: 3.87%.
Fondomutua pensiones UNO, FP is a pension fund authorised and regulated by the Directorate General for Insurance and Pension Funds (DGSFP) (registration no. F2154). Mutuactivos Pensiones, SAU, S.G.F.P. (DGSFP registration no. G0135) is the Fund’s Management Company and EDM Gestión, SAU, SGIIC (CNMV registration no. 49) is the Delegated Management Company and the Promoter of the Pension Plan EDM PENSIONES RENTA FIJA, 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 has achieved the following annual return: 2021: 1.57%; 2022: -8.16%; 2023: 4.44%; 2024: 3.26%; 2025: 2.56%.
Fondomutua pensiones DOS, FP is a pension fund authorised and regulated by the Directorate General for Insurance and Pension Funds (DGSFP) (registration no. F2155). Mutuactivos Pensiones, SAU, S.G.F.P. (DGSFP registration no. G0135) is the Fund’s Management Company and EDM Gestión, SA, SGIIC (CNMV registration no. 49) is the Delegated Management Company and the Promoter of the Pension Plan EDM PENSIONES RENTA VARIABLE, 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 has achieved the following annual return: 2021: 22.05%; 2022: -20.56%; 2023: 29.98%; 2024: 10.76%; 2025: -1.58%.
