Epsilon Fund -
Emerging Bond
Total Return
This is our strategy to generate an absolute return, unrelated to Euro Area bonds, by leveraging carry (return) opportunities on emerging securities and reducing exchange and interest rate risks.
Epsilon Fund - Emerging Bond Total Return mainly invests in short- and medium-term bonds (less than 36 months) with a low interest rate risk, issued by governments and companies of Emerging Countries. Over time, this sector recorded a track record combined with moderate volatility. According to this strategy, we will tactically invest in currencies, spread duration and local currency bonds with the aim of finding interesting opportunities in the markets and, simultaneously, offer drawdown protection.
Strategy to contain the volatility of emerging bonds
The investment process of the fund is based on two performance drivers with the objective to contain the volatility of emerging bonds. The core component invests in short-term bonds with currency generally hedged in euro, while the tactical component may grasp opportunities on currencies, spread duration, and local currency debt.
Main Risks of the sub-fund
The risk indicator assumes you keep the product for 4 years.
The summary risk indicator is a guide to the level of risk of this product compared to other products. It shows how likely it is that the product will lose money because of movements in the markets or because we
are not able to pay you.We have classified this product as 2 out of 7, which is a low risk class. This rates the potential losses from future performance at a low level,
and poor market conditions are very unlikely to impact the capacity of Eurizon Capital S.A. to pay you.
This fund does not offer any form of capital protection against future negative market conditions and, as a consequence, you may lose part of or the entire amount originally invested.
If the fund is not able to pay you out what is due, you may lose your entire investment.
Main costs: illustrative share class - LU0365358570, Class Unit I EUR. Accumulation - Entry costs: 0%, Exit costs: 0%, Management fees and other administrative or operating costs: 0.38%,Transaction costs: 0.23%, Performance Fee: 0.05%.The
performance fee calculation is based on a comparison of the net asset value per unit against the High Water Mark where the High Water Mark is defined as the highest net asset value per unit recorded at the end of the five previous financial years, increased by the year-to-date return of the fund's hurdle rate. The actual amount will vary depending on how well your investment performs. The aggregated cost estimation above includes the average over the last 5 years. Main risks: country risk – China; country risk – Russia; credit, + below investment grade; currency; derivatives; emerging and frontier markets; hedging; interest rate; investment fund; management; market; sustainable investing.
An investment team that combines different skillsets
Our team includes portfolio managers specializing in various types of issuers and financial instruments (money markets, governments, and spread products). Our goal is to generate returns by monitoring risks for the part concerning securities with an exposure to certain reference markets and/or asset classes.
Data at 30 June 2023 ESG information
The management team builds the strategy using ESG criteria to exclude securities of issuers or sectors with a low ESG profile or involved in the production of controversial weapons. The fund is qualified under Article 8 of Regulation (EU) 2019/2088.
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SFDR classificationThe Sub-fund promotes environmental or social characteristics as per Article 8 of the Regulation (EU) 2019/2088 on sustainability‐related disclosures in the financial services sector (“SFDR”). It does not have sustainable investments as its objective.
What environmental and/or social characteristics are promoted by this financial product?
The fund promotes environmental and social characteristics by investing in securities of issuers with favourable ESG characteristics. Favourable ESG characteristics are determined on the base of ESG score integration and sector exclusion as detailed in the following points. -
ESG score integrationIn accordance with good governance practices, the fund aims to pursue an "ESG score" - calculated at the overall portfolio level - higher than that of its investment universe, through the integration of ESG factors in the analysis, selection, and composition of its investments.
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Sector exclusionThe fund does not invest in issuers operating in sectors considered "not socially and environmentally responsible". Issuer exclusion: the fund does not invest in "critical" issuers (i.e. with a lower ESG sustainability rating level in the equity and bond investment universe) for which an escalation process is activated.
Before making an investment decision, please read the risk section of the prospectus and particularly the specific risks related to that Sub-fund as well as the costs. Please also consider all the characteristics, objectives, methodological limits and read the SFDR Pre-contractual disclosure, as well as the Summary of the website product disclosure, available in English or in authorized language, in the “Sustainability-related Disclosure”.
Useful insights
This marketing communication relates to Epsilon Fund (The “Fund”), a Luxembourg UCITS in accordance with Directive 2009/65/CE and the Luxembourg Law of 2010. This document is issued by Eurizon Capital S.A. organized as a public limited company in Luxembourg, at 28, boulevard Kockelscheuer, L-1821 Luxembourg, and authorised as management company of the Fund under the Law of 2010. This marketing communication is intended for professional investors as defined in the European Directive 2014/65/EU (MiFID) or relevant legislation in countries where the Fund is registered for distribution and is not intended for retail investors nor US Persons. Before taking any investment decision, read the Prospectus, the Key Information Document (the “KID”), and the last annual or semi-annual financial report, available in English (and the KIDs or in authorized language) on the website www.eurizoncapital.com.
This document does not constitute any legal, tax or investment advice. Past performance does not predict future returns. There is no guarantee that the forecasts will be reached in the future. Liaise with your tax and financial advisor to find out whether a product is suitable to you and understand the related risks and tax impacts. The tax treatment depends on the individual circumstances and may be subject to change in the future. A summary of investor rights is available in an official language (or authorised language) at www.eurizoncapital.com/en/investors-rights.
The Management company reserves the right to terminate the marketing arrangements of the Fund in your country. Before investing, read the risk section of the prospectus and the specific risks and costs related to the Fund. Also read the SFDR Pre-contractual disclosure, and the documents available in English or in authorized language, in the “Sustainability” section of the webpage: www.eurizoncapital.com.
SWITZERLAND:
In Switzerland this document is an advertising as per the Federal Act on Financial Services (FinSA), is intended for professional and institutional investors only and is not intended for retail investors. The representative and paying agent in Switzerland is Reyl & Cie SA, Rue du Rhône 62, CH-1204 Geneva. The prospectus, the KID, the fund regulation and the annual and semi-annual reports may be obtained from Reyl & Cie SA. Daily publication of the net asset values of the Units offered in Switzerland: www.fundinfo.com
CHILE:
In Chile when the Sub-Fund has been registered for distribution by the Comision Clasificadora de Riesgo (CCR) in Chile exclusively to Chilean Pension Funds under Agreement Nr 32 of the CCR, this document is not intended to investors who do not qualify as a Chilean Pension Funds. To find out whether this Sub-Fund is registered with the CCR, please refer to www.eurizoncapital.com.