19/02/2026

By Alexis Sebah, Lead Portfolio Manager and Miguel Raminhos, Deputy Portfolio Manager of EdR SICAV Short Duration Credit fund at Edmond de Rothschild Asset Management (France)

First of all, what is short-duration credit?

Short-duration credit refers to investments in corporate bonds with short maturities, generally between one and three years. As these securities are close to their maturity date, they naturally offer greater visibility on their expected performance (coupons to be collected, credit risk over a limited time horizon, etc.).

In terms of risk/return, what are the main advantages1 of a short duration strategy?

The first advantage is reduced modified duration to interest rates and credit spreads.

Short duration2 bonds have a limited residual life: the shorter the duration, the less the bond price reacts to movements in interest rates or spreads3.

By way of comparison, the average modified duration to rates and spreads is around 5 years for investment grade4 bonds and close to 3 years for high-yield bonds. A short-duration bond index has a significantly lower modified duration, generally between 1.5 and 2 years5. In concrete terms, for the same market shock, short‑duration bonds will experience smaller price fluctuations than longer‑maturity bonds.

On the other hand, in a buoyant bond market (sharp fall in rates, marked tightening of spreads), their upside potential is more limited. Nevertheless, their main advantage lies in their defensive nature, as they allow investors to capture the carry6 of the asset class (coupons and credit risk premium) while cushioning much of the volatility associated with movements in interest rates and spreads.

Which investor profiles is this approach primarily aimed at?

A short-duration bond strategy is particularly well suited to investors with a conservative risk profile in the fixed income segment, as well as to those seeking an alternative to short-term investments that offers a higher level of risk but also greater potential returns.

EdR SICAV Short Duration Credit: What are the characteristics of your fund and how does it stand out?

The strategy was designed to take advantage of the defensive features of short-duration credit, while maintaining an attractive carry level.

The portfolio is managed using a ladder structure, in which the various maturity pockets are equally weighted, resulting in an overall stable duration over time, generally between 1.5 and 2.5 years7. This approach limits the portfolio's modified duration to changes in interest rates and credit spreads, while maintaining significant exposure to credit carry. At the same time, approximately 2% of the portfolio is automatically reinvested each month, in line with prevailing market conditions, in order to smooth both the performance and volatility profile over time.

Finally, how do you manage credit risk in the fund?

The portfolio combines investment grade (IG) and high yield8 (HY) bonds, with a particular focus on refinancing risk. In practice, this translates into a bias towards issuers rated around BBB–BB9, which are deemed capable of refinancing their debt on attractive terms.

Another key decision concerns the dynamic allocation between the two segments based on our position in the economic cycle. At the beginning of the cycle, when the environment is favorable for credit, the HY portion may be increased, with an allocation of around 30% IG/70% HY. During a recession or sharp slowdown, the management team adopts a more defensive stance, upgrading the overall quality of the portfolio to an allocation closer to 70% IG/30% HY. This flexible approach allows the fund's risk/return profile to be adjusted according to market conditions. 

[1] Short-term bonds carry credit risk. The main risk is issuer default, i.e., failure to pay interest and/or repay principal. Credit risk is also linked to an issuer's credit rating downgrade. Investors should note that the net asset value of a mutual fund may fall in the event of a total loss on a transaction following the default of a counterparty.

[2] The duration of a bond, or any other fixed-rate financial instrument, is a measure of the sensitivity of its price to a change in interest rates

[3] The spread refers to the difference between the actuarial yield on a bond and that on a risk-free loan with the same maturity.

[4] Investment Grade: bonds rated as high quality by rating agencies.

[5] Source: Edmond de Rothschild AM, data as of 31/01/2026.

[6] The carry of a bond refers to its yield over a given holding period.

[7] The investment process described above incorporates various internal management constraints put in place by the management team. This is the process currently in place, but it is subject to change over time.

[8] High Yield are corporate bonds with a higher default risk than investment grade bonds but which pay out higher coupons.

[9] Financial ratings between AAA and BBB- on Standard & Poor's scale correspond to Investment Grade bonds, while those strictly below BBB- are classified as High Yield bonds.

DISCLAIMER 
This is a marketing communication. Please refer to the UCITS prospectus and the Key Information Documents before making any final investment decision.  EdR SICAV Short Duration Credit is a sub-fund of the French SICAV approved by the AMF and authorized for marketing in Belgium, Switzerland, Germany, Spain, France, Italy and Luxembourg.
Fund characteristics*Investment Objective: The fund aims to outperform its benchmark (50% ICE BofA 1-5 Year A-BBB Euro Corporate Index by investing in corporate bonds over the recommended investment period, net of fees. To achieve this objective, additional return will be targeted through active management of interest rate and credit risks.
ISIN Codes: Share A: FR0013460920 / Share I: FR0013461571
Inception date: 20/01/2020
Maximum management fees: Share A: 0.70% incl. tax / Share I: 0.35% incl. tax
Minimum initial subscription: Share A: 1 share / Share I: €500 000
Subscription fee: Share A: 1% maximum / Share I: None
Redemption charges: None
Variable management fees Shares A & I: 15% of outperformance above the benchmark
Benchmark: 50% de ICE BofA 1-5 Year A-BBB Euro Corporate Index, coupons reinvested & 50% ICE BofA BBCCC 1-3 Year Euro Developed Markets High Yield Constrained index, coupons reinvested
Recommended investment horizon: > 2 years
*Shares described herein are the main euro-denominated shares. The fund also has shares in other currencies. Please ask you sales contact for any further information. Please note that not all costs and share classes are disclosed in this documents. Please refer to the KID/prospectus for further details.

Main investment risks
Risk indicator: 2/7.  The risk indicator rates this fund on a scale of 1 to 7. This indicator is used to assess the level of risk of this product in comparison to other funds and a category 1 rating does not mean that the investment is risk free. In addition, it indicates the likelihood that this product will incur losses in the event of market movements or our inability to pay you.This indicator assumes that you hold the product until the end of the recommended holding period of this fund. The actual risk may be very different if you choose to exit before the end of the recommended holding period of this Fund. The risks described below are not exhaustive.
Risk of capital loss: The UCITS does not guarantee or protect the capital invested; investors may therefore not get back the full amount of their initial capital invested even if they hold their units for the recommended investment period. Credit risk linked to investments in speculative securities: The UCITS may invest in issues from countries or companies rated, at the time of purchase, as “non-investment grade” by a rating agency (rating of less than BBB- according to Standard & Poor’s or any other equivalent rating assigned by an independent agency that has an equivalent internal rating issued by the Management Company) or which are considered equivalent by the Management Company. These issues are securities deemed speculative and present a higher risk of issuer default. This UCITS should be considered partly speculative and aimed specifically at investors who are aware of the risks inherent in investing in these securities. Thus, the use of “high yield” securities (speculative securities presenting a greater risk of issuer default) may result in a greater risk of falling NAV. Credit risk: The main risk linked to debt securities and/or money market instruments such as treasury bills (BTFs and BTANs) or short-term negotiable securities is that of issuer default, due either to the non-payment of interest and/or the non repayment of capital. Credit risk is also associated with the downgrading of an issuer. Shareholders are reminded that the net asset value of the Sub-fund is likely to fall if a total loss is recorded on a financial instrument following default by an issuer. The inclusion of debt securities in the portfolio, whether directly or through UCIs, exposes the Sub-fund to the effects of variations in credit quality. Interest rate risk: By holding debt securities and money market instruments, funds are exposed to changes in interest rates. This risk is defined as a rise on interest rates causes a decline in bonds valuation and therefore a fall in of the fund’s NAV.

February 2026. Non-contractual document designed for information purposes only. Reproduction or use of its contents is strictly prohibited without the permission of the Edmond de Rothschild Group. The information contained in this document does not constitute an offer or solicitation to trade in any jurisdiction in which such offer or solicitation is unlawful or in which the person making such offer or solicitation is not qualified to act. This document does not constitute and should not be construed as investment, tax or legal advice, nor as a recommendation to buy, sell or continue to hold any investment. The Edmond de Rothschild Group shall not be held liable for any investment or divestment decision taken on the basis of the information contained in this document. The funds presented may not be registered and/or authorized for sale in your country of residence. If you have any doubts about your ability to subscribe to this fund, please contact your professional advisor. The figures, comments, forward looking statements and other information contained in this presentation reflect the Edmond de Rothschild Group’s view of the markets, their development and their regulations, taking into account its expertise, the economic context and the information available to date. They may no longer be relevant on the day the investor reads them. Consequently, the Edmond de Rothschild Group shall not be held responsible for the quality or accuracy of economic information and data obtained from third parties. Any investment involves specific risks. Investors are therefore advised to ensure that any investment is suitable for their personal circumstances by seeking independent advice where appropriate. In addition, investors should read the Key Information Documents (KID) and/or any other document required by local regulations, which is provided prior to any subscription and is available in French and in English on the website www.edmond-de-rothschild.com under the “Fund Center” tab or free of charge on request. The management company may decide to cease marketing this Fund in accordance with Article 93a of Directive 2009/65/EC and Article 32a of Directive 2011/61/EU.
For EU investors: This document is issued by Edmond de Rothschild Asset Management (France); 47, rue du Faubourg Saint-Honoré; 75401 Paris Cedex 08; Public limited company with a Management Board and Supervisory Board and a capital of 11,033,769 euros; AMF approval number GP 04000015, 332.652.536 R.C.S. Paris. A summary of investors’ rights in English and French can be obtained at the following link: www.edmond-de-rothschild.com/media/go5fm1hx/edram-en-main-rights-of-investors.pdf. In Spain, the SICAV is registered at the CNMV under number 1801.
For Swiss Investors: This marketing material is issued by Edmond de Rothschild (Suisse) S.A. located at 18 rue de Hesse, 1204 Geneva, Switzerland, a Swiss bank authorised and regulated by the Swiss Financial Market Supervisory Authority (FINMA). The “Edmond de Rothschild SICAV” funds mentioned in this material are organized under the
laws of France and have been approved to be offered in Switzerland to non-qualified investors by the Swiss Financial Market Supervisory Authority (« FINMA »).
REPRESENTATIVE AND PAYING AGENT IN SWITZERLAND: Edmond de Rothschild (Suisse) S.A.; rue de Hesse 18 ; 1204 Geneva. 
© Copyright Edmond de Rothschild. All rights reserved.

MANAGEMENT COMPANY AND GLOBAL DISTRIBUTOR
EDMOND DE ROTHSCHILD ASSET MANAGEMENT (FRANCE)
47 rue du Faubourg Saint-Honoré / FR - 75401 Paris Cedex 08
Public limited company with a Management Board and Supervisory Board and a capital of
11,033,769 euros
AMF approval number GP 04000015 - 332.652.536 R.C.S. Paris
www.edmond-de-rothschild.com 

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