Co-founder of Affari Miei
April 2, 2024
Today we analyze the fondo Eurizon Global Leaders ESG 50 (ISIN: IT0005450124) in every aspect, starting from KID and going to discover all its characteristics to better understand what instrument it is about and above all whether it could be a good investment for you.
The fund in question belongs to the company Eurizon Capitalthe well-known savings management company that belongs to the Intesa San Paolo group.
If you continue reading the article you will find all the information and mine too opinions about.
Let’s start!
This article talks about:
Eurizon: a presentation
Eurizon Capital is the Intesa Sanpaolo company that deals exclusively with asset management, i.e. the management of investment products. Eurizon deals both with managing individual funds and more complete managed savings products, such as capital accumulation plans (PAC) and capital investment plans (PIC).
The company can count on over €300 billion under management and more than 30 years of history: for this reason it is one of the largest and most historic asset management companies in Italy. The main office is located in Milan, but the company’s registered office is in Luxembourg.
Characteristics of the Eurizon Global Leaders ESG 50 fund
Let’s start immediately by describing the main characteristics of the Eurizon Global Leaders ESG 50 fund.
Based on what is declared in the KID (Key Investor Information Document), it is an actively managed fund, belonging to the category of flexible funds.
But, before addressing all the peculiar characteristics of the product, I would like to explain to you what flexible funds are.
Flexible funds are distinguished from other actively managed funds by the fact that the manager carries out a strategic asset allocation without adopting a benchmark as a reference – that is, without using a pre-established portfolio of securities as a “guide”.
This fund aims to achieve growth in invested capital over a time horizon of more than 5 years, in compliance with a risk budget identifiable with a 99% monthly VaR (value at risk) of -9.00%.
This risk measure allows you to quantify the maximum potential loss that the fund’s portfolio can suffer over a one-month time horizon with a probability of 99%.
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What he invests in
This fund invests in financial instruments of nature bond, monetarye equity.
Equity exposure is progressively and dynamically increased during the first two years of the fund’s investment cycle, starting from 10% up to a maximum of 50%.
Bonds and monetary instruments are issued by states, supranational organizations and companies, while those of issuers from emerging countries can account for up to 40% of assets.
The benchmark
What is the benchmark? It is a stock market index that determines many aspects of the fund’s strategy.
Managers can buy and sell the instruments that are part of the reference index, to try to obtain a better performance than that achieved by the benchmark.
Since the bottom is flexibleby definition the fund does not follow any reference index.
Portfolio composition in detail
Let’s analyze the wallet and so we can see the composition of the basket in detail.
As regards the equity part, we see that the most represented sector is information technology at 14.20%, followed by the medical and pharmaceutical sector at 8.6% and the financial sector at 6.8%.
The risk profile
Let’s now see what the risk profile is: we are on a level 5 on a scale ranging from 1 to 7.
This is essentially a medium/high risk, also due to the higher percentage of investments in shares.
Subscription, exit and use of proceeds methods
The flexible fund in question requires a minimum initial subscription of €500, so it is, if we want, an investment within the reach of many investors.
A single payment by means of a single payment is permitted PICthat the capital accumulation plan.
Lastly: the income distribution policy is accumulation, which means that the profits accrued each year are not distributed but reinvested in the fund itself.
Costs
If we now focus on the analysis of the costs and the statement that allows us to understand which commissions we have to bear, we can understand in broad terms how they will impact our performance.
The expenses to be paid are:
Subscription Charges: not foreseen;
Refund costs: massimo 2,25%;
Annual running costs: 1.66% of which the management commission amounts to 0.90%;
Performance fees: equal to 20% of the lower value accrued in the period between 1 October of each year and 30 September of the following year between the percentage increase in the value of the fund share compared to the highest value recorded by the same on the last day of valorisation of the previous conventional years.
In case the issue of costs is not clear to you, I recommend you download our free report in which we explain how the costs of the funds are costing Italians billions of euros without them realizing the real importance of the topic.
Historical returns
The past performances they can be useful for having an overview of the fund and for having a sort of forecast: naturally, past returns should not be taken as a certain prediction of the future.
On the official website we find the return projectionand I attach the screenshot here:
Here I attach the graphic taken from October 2023 until March 2024. As you can see, the trend is growing, but there is no reference benchmark since the fund is flexible.
For this reason, it is difficult for the average investor to understand whether the choices made by the manager were truly advantageous: the returns of this fund could be combined with those of another basket, which has a similar objective and presents the same level of risk.
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Final opinions of Affari Miei
Eurizon Global Leaders ESG 50 requires that you, as a participant in the fund, delegate the responsibility for investing your capital to the manager. You give him complete freedom in choosing markets and instruments. The only sticking point is the risk profile.
Since there is not even a benchmark, the manager can do what he wants with the justification that he must diversify the risk and seize the most interesting opportunities offered by the market. This principle is typical of managed savings products.
A flexible fund, however, is even more complex than a “normal” mutual investment fund: in fact, with a flexible fund it becomes practically impossible to maintain a margin of control.
One of the risks you run is that of finding yourself, at a certain point, with an investment that has changed compared to the beginning, and which no longer reflects your expectations.
Here on Affari Miei we often prefer to invest in ETFs when talking about funds, since they offer lower costs and at the same time are products that you can purchase independently without conflicts of interest. They are listed on the stock exchange and have passive management, that is, they do not try to beat an index but simply copy it. This means that you don’t have to pay sky-high fees to managers and that performances are almost always better.
If you think you want to better understand the critical issues of mutual funds, I recommend our free report in which we explain how inefficient funds are a return-devouring system for investors.
If, however, you are intrigued by Affari Miei and do not yet know our approach to personal finance and investments, you can start here.
Why it is important to define a strategy
Before choosing the instruments to put in your portfolio, it would be better to define an investment strategy and, possibly, increase your financial education.
An informed investor, and aware of his objectives, is unlikely to purchase ineffective and harmful instruments.
On Affari Miei you will find guided paths for investing, suitable for the different stages of saving and life:
Happy continuation on Affari Miei!
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