We offer a Limited Tracking Error funds covering both Fixed Income and Equity asset classes.

We offer a Limited Tracking Error funds covering both Fixed Income and Equity asset classes.

Eurizon Capital Real Asset SGR S.p.A. (“ECRA”) is an asset management company focused on alternative investments in private markets. The company is part of the Asset Management Division of the Intesa Sanpaolo Group and is subject to the management and coordination of the Parent Company Intesa Sanpaolo S.p.A.

Eurizon Capital Real Asset believes that the infrastructure sector represents an attractive, downside-protected asset class given investments are typically supported by hard assets with long useful lives and stable, inflation-protected cash flows. Additionally, infrastructure investments typically have low correlation with other asset classes, given that most infrastructure assets provide essential services and are resilient during economic downturns. Finally, given the long-term contracted nature of many infrastructure investments, they generally have good predictable cash flow with strong free cash flow generation.

Consistent with EC RA’s broader approach to private markets investing, over the last six years the company has pursued a disciplined and value-oriented approach to infrastructure investing. EC RA has built up a diversified portfolio of 14 funds able to generate attractive risk-adjusted returns with a global exposure to the infrastructure sector.

The portfolio is composed of both core and core plus/value add strategies, with a global exposure, both on equity and debt side. The underlaying funds’ investments cover the spectrum of infrastructure sectors, including, but not limited to, utilities and energy infrastructure, transportation, communications infrastructure, waste management and social infrastructure.

EC RA, on behalf of one of its clients, has also invested in a dedicated infrastructure debt fund where EC RA’s investment team has an active role in selecting the underlying assets. The fund invests in senior secured investment grade tranches of infrastructure-related debt or bonds, with a global approach. This unique fund allowed EC RA’s investment team to gain closer experience with the assets underlying our infrastructure portfolio. The current portfolio of the fund is composed of 32 assets, with the following split.

Within our best expertise we offer to our institutional clients different investment solutions, we take the opportunity to highlight the following top seller strategies:

Eurizon Fund – Absolute Green Bonds, a sub-fund of Eurizon Fund, invests in an international portfolio of Green Bonds.

The sub-fund aims to achieve a positive absolute return in Euros in the medium term. The sub-fund is a global low risk thematic bond with a “green” focus and it uses multiple performance drivers. The sub-fund focus on green thematic investing in bonds, mostly investment grade, select to foster the growth of green, environmental-themed projects according to the GBPs. To do this, the management team screen the green-labeled universe and select financial instruments characterized by a high level of “greenness”, expressing a preference for sectors delivering the highest environmental impact and also take extreme care in avoiding the greenwashing problem.

Diversification by geography and other relevant dimensions using a new fixed income “asset class” allow the exposure to the global bond market. The absolute return style, that characterized the management approach of this sub-fund, allows to management team to be flexible and dynamic in managing the portfolio and to use important performance sources like duration, currency bet and other bets on corporate and emerging issuers.

Eurizon Fund – Absolute Prudent and Eurizon Fund – Absolute Active invest in multiple assets maintaining the volatility that comes from interest rates, spread, forex markets and equity investments moderate.

The fund operates a simple and transparent strategy whose performance volatility over time is kept under control either ex ante and ex post. The investment strategy is composed by two distinct performance drivers: a strategic and a tactical portfolio. A low duration portfolio (Strategic) with moderate volatility is invested in deposit and short term bond (government and corporate) with maturity less -then 3 years. The Tactical portfolio is composed by strategies originating from the investment committee ideas. The Tactical portfolio strategies apply to Fixed Income, Equity, Credit and Forex instruments proposed by a Product Specialist which cooperate with the fund manager. These strategies get through a risk analysis assessment before implemented in order to smooth direct and indirect risks.

Please refer to the following description regarding our emerging market strategies:

Eurizon Fund Bond Emerging Markets invests in Bond EM Hard Currency. The strategy is related to the investment in debt and debt-related instruments of any kind, issued by governments and their agencies located in or constituted under the laws of the emerging countries, including those with a sub-investment grade, at issue or issuer level.

The process follows four steps:

• Assessment of the global backdrop

• Definition of the outlook for the EM class as whole

• Country Analysis

• Security selection

We can offer another fund investing in local emerging markets debt, based in London which mainly invests, either directly or through derivatives, in government bonds issued in emerging markets, including China and Russia, and denominated in any local currency.

In addition we wish to highlight our Eurizon Fund Emerging Bond Total Return thant invests mainly in short and medium term debt and debt-related instruments issued by governments and private companies located in Emerging Countries, including lower quality ("speculative grade") instruments.

Please refer to the following description regarding our factor investing strategies:

Eurizon Fund – Equity World Smart Volatility is a sub-fund that invests in equity Developed markets with the aim to pursuit a capital appreciation through a full exposure to the equity market. The strategy follows an investment approach that explicitly addresses the objective of improving efficiency and diversification while minimizing the total portfolio risk.

This approach is suitable for investors that consider equity market attractive, but they want to participate to their potential growth with less systematic risk.

The investment process follows a quantitative approach that has been widely known since Markowitz’s seminal paper. The Minimum Variance portfolio is positioned graphically on the very left tip of a mean-variance efficient frontier and represents an equity portfolio having the lowest return-variance for a given covariance matrix of stock returns.

Eurizon World Smart Volatility fund is optimized starting from MSCI World Developed index by using an estimated security co-variance matrix to define an optimal portfolio, having the lowest absolute volatility for a given set of constraints. The reference co-variance matrix is based on the Barra multifactor model, Global Market Equity Model for Long-Term investors (GEMLT), that considers accurately industry, country, currency and style factors to decompose risk along the optimization process.

The management goal is to provide an equity investment able to provide a better return per unit of risk with the following characteristics:

• Higher Sharpe ratio and M squared (Modigliani risk adjusted performance) when compared to the parent index

• Lower absolute volatility when compared to the parent index

• Lower capitalization bias -Bias towards stocks with low idiosyncratic risk

We can offer the same approach also for Emerging Markets, China and Italy.