Ethna-DEFENSIV
Fund profile
The Ethna-DEFENSIV is a fixed income fund that does not follow any benchmarks. The actively managed fund with the most defensive risk profile among the Ethna Funds, invests primarily in bonds issued by OECD countries. The high-quality bond portfolio consists mainly of government and corporate bonds. These bonds tend to be more conservative in nature and are managed in a very flexible manner. This allows us to quickly align the fund's risk profile to prevailing market conditions and to take advantage of attractive single name securities. In addition, bonds with a rating below investment-grade can be added.
In line with the principle of maximum flexibility, Ethna-DEFENSIV is able to exploit the full range of the bond segment, thereby increasing its return potential. Another important driver of the fund's performance is the active management of spreads, duration and currency through liquid instruments, also known as overlay management. Spread risks and duration are managed by actively adjusting maturities and bond issuers. In addition, the duration of the Ethna-DEFENSIV can also be managed through the use of futures and the currency through forward exchange transactions.
The top-down approach in the Ethna-DEFENSIV
The Ethna-DEFENSIV’s Portfolio Management Team, which has a proven track-record in the fixed income space, uses a top-down approach with a clear view of macroeconomic developments to determine not only the appropriate bond allocation but also its investments in other asset classes. This, together with its bottom up bond selection process, means that the Ethna-DEFENSIV can flexibly select the most appropriate opportunities available while, at the same time limit potential risks, and manage its volatility and drawdowns.
The Ethna-DEFENSIV as a base investment for conservative investors
With a balanced investment strategy that values diversification and liquidity, the Ethna-DEFENSIV’s aims are capital preservation and generating positive returns over a mid-term (3 – 5 year) investment horizon. This makes it suitable as a base investment for conservative investors who want to benefit from a lower risk strategy in the global financial markets.
The Ethna-DEFENSIV is a fixed income fund that does not follow any benchmarks. The actively managed fund with the most defensive risk profile among the Ethna Funds, invests primarily in bonds issued by OECD countries. The high-quality bond portfolio consists mainly of government and corporate bonds. These bonds tend to be more conservative in nature and are managed in a very flexible manner. This allows us to quickly align the fund's risk profile to prevailing market conditions and to take advantage of attractive single name securities. In addition, bonds with a rating below investment-grade can be added.
In line with the principle of maximum flexibility, Ethna-DEFENSIV is able to exploit the full range of the bond segment, thereby increasing its return potential. Another important driver of the fund's performance is the active management of spreads, duration and currency through liquid instruments, also known as overlay management. Spread risks and duration are managed by actively adjusting maturities and bond issuers. In addition, the duration of the Ethna-DEFENSIV can also be managed through the use of futures and the currency through forward exchange transactions.
The top-down approach in the Ethna-DEFENSIV
The Ethna-DEFENSIV’s Portfolio Management Team, which has a proven track-record in the fixed income space, uses a top-down approach with a clear view of macroeconomic developments to determine not only the appropriate bond allocation but also its investments in other asset classes. This, together with its bottom up bond selection process, means that the Ethna-DEFENSIV can flexibly select the most appropriate opportunities available while, at the same time limit potential risks, and manage its volatility and drawdowns.
The Ethna-DEFENSIV as a base investment for conservative investors
With a balanced investment strategy that values diversification and liquidity, the Ethna-DEFENSIV’s aims are capital preservation and generating positive returns over a mid-term (3 – 5 year) investment horizon. This makes it suitable as a base investment for conservative investors who want to benefit from a lower risk strategy in the global financial markets.
Portfolio Managers
ESG
ESG – taking environmental, social and governance criteria into account
Our aim is to offer clients responsible investment solutions with a competitive and sustainable return, as reflected in our investment guidelines and processes. The Ethna-DEFENSIV pursues an ESG strategy that complies with Article 8 of the EU’s Sustainable Finance Disclosure Regulation (2019/2088). In its bond and equity investments, the fund therefore gives preference to companies that have low exposure in terms of significant ESG risks, as well as companies that actively manage and thus reduce the ESG risks inevitably associated with their business activities. In addition, the sustainability approach taken by the Ethna-DEFENSIV is underscored by comprehensive exclusions:
- Investments in companies with a core activity in armaments, tobacco, pornography, speculation in basic foodstuffs and/or the mining/distribution of coal are prohibited.
- Furthermore, we do not invest in companies that have been found to be in serious breach of the principles of the UN Global Compact and have no convincing plan in place to remedy the situation.
- In the case of sovereign issuers, we exclude investments in countries that have been designated as “Not Free” in the annual analysis carried out by Freedom House.
Opportunities & Risks
All financial investments are associated with opportunities and risks. Below you will find a compact overview of the opportunities and risks of the Ethna-DEFENSIV:
Opportunities
- A professional Portfolio Management Team with many year of experience.
- Participation in positive performance of bond markets.
- Reduction of value fluctuations by spreading the investment capital over a large number of individual securities (diversification).
- Active risk management and hedging transactions (emphasis on capital preservation).
- Active portfolio management with the aim of delivering positive returns, even in a weak market phase.
- Stability and continuity by focusing on fixed income securities.
Risks
- Market, sector and company-related price losses in the fund’s bonds investments; also as a result of a general rise in yields and/or increase in yield premiums for specific bond issuers.
- General, geographical and geopolitical country risks; these include the risk that an issuer of a bond, despite being solvent, cannot fulfil its obligations due to an inability or unwillingness on the part of a particular country to transfer funds to another country.
- Issuer, counterparty credit and default risk due to investing in bonds and hedging trades; these include the risk of insolvency due to issuer or counterparty debt overload or illiquidity. A total loss of the affected investment instrument is possible.
- Exchange rate risks through investing in foreign currencies or bonds denominated in a foreign currency.
- The investor suffers a loss if they sell the fund units at less than the purchase price.
For detailed information on the opportunities and risks of investing in the fund, please refer to the sales prospectus.
The Ethna-DEFENSIV is a bond fund that does not follow any benchmarks. The actively-managed fund, which has the most defensive risk profile of the Ethna Funds, focuses on bonds from issuers in OECD countries, with its core investment in a high-quality portfolio of government and corporate bonds.
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Applies, among others, to the share class Ethna-DEFENSIV (A). |
Out of 5 657 Cautious Allocation funds as of 30.04.2022. |
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