Jan 23 - Fitch Ratings has affirmed DNCA Invest Eurose's 'Strong' Fund
Quality Rating. The fund is Luxembourg-domiciled and is managed by DNCA Finance.
Launched in June 2007, DNCA Invest Eurose is a conservative balanced fund
investing in bonds (including convertible) and stocks of eurozone companies with
EUR729m of assets at end-December 2012.
The investment process is the same as that of DNCA Eurose (the fund's French
clone). It was established in 2003 when Jean Charles Meriaux, CIO, joined DNCA.
The philosophy follows a largely buy-and-hold approach with a clear focus on
income and well-known companies that can be invested in via bonds or stocks. The
process does not have benchmark constraints and can have large sector deviations
relative to market indices. The allocation is not managed tactically but
portfolio managers (PMs) can seize asset class opportunities. The formalisation
is limited, mitigated by the communication sharing between DNCA Finance's
investment professionals, the strong accountability of the two experienced PMs
and the low turnover of the fund. Overall, the investment edge resides in a
simple strategy, focused and well-researched investment universe and broad
investment latitude within a conservative mandate that limits equity exposure to
The DNCA Invest Eurose fund (I Cap share class) has returned 10.83% over the
year to 31 December 2012, outperforming its Lipper category "Mixed Asset EUR
Cons - EuroZone" by 4.95%. 70% of the performance over 2012 can be explained by
the eurozone bonds and convertible bonds positions, while the equity bucket
(20.5% of the portfolio on average), explained the remaining 30%. At end-2012,
the fund was invested 23.3% in equity, and 70.7% in bonds yielding 2.96% on
Over five years, the fund has outperformed its category by 27.24%. DNCA Invest
Eurose was launched in 2007 and achieved the best Lipper Leader score over three
and five years; while its French clone (launched in 2000) has achieved the best
score over 10 years. This strong track record coupled with a satisfactory
qualitative assessment enabled the fund to reach a "Strong" FQR rating.
Founded in 2000, DNCA Finance is owned by its management and a private equity
fund, following a leveraged management buyout transaction in 2011. At
end-December 2012, DNCA Finance had EUR5.2bn of assets under management, mainly
in European equity and balanced funds, predominantly for French investors with a
recent foray abroad.
Fitch's Fund Quality Ratings combine Fitch's experience in qualitative fund
analysis with rankings and performance data from Lipper, a Thomson Reuters
company. Fitch's Fund Quality Ratings offer an independent, forward-looking
assessment of a fund's key performance and risk attributes and consistency of
longer-term returns, relative to peer group or benchmarks. The ratings focus on
the fund manager's investment process, key fund performance drivers, risk
management, and the quality of the fund's operational infrastructure.Additional information is available at www.fitchratings.com.
The ratings above were solicited by, or on behalf of, the issuer, and therefore,
Fitch has been compensated for the provision of the ratings.
Applicable criteria, 'Fund Quality Rating Criteria', dated 19 September 2011, is
available at www.fitchratings.com.
Applicable Criteria and Related Research:
Fund Quality Ratings Criteria: Assessing Funds' Investment Processes and