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Harewood Covered European Equity has met its management objective over the last three years through outperforming the DJ Eurostoxx 50 index by more than 26% (+5.6% versus 20.4%), while offering a lowered volatility level (18.6% versus 29.1%).*
Launched on 19 October 2006, Harewood Covered European Equity is a UCITS III fund designed for investors who seek exposure to European equities with a defensive profile. The objective of the fund is to realise, over a suggested investment horizon of three years, a performance superior to that of the DJ Eurostoxx 50 index with a lower volatility. In particular the fund aims to moderate drawdowns whilst benefiting from a majority of the increases in the DJ Eurostoxx 50 index.
Harewood Covered European Equity is based on a ‘Buy Write' strategy that consists of long positions in the DJ Eurostoxx 50 index coupled with a short position in call options on the same index: The additional performance of the fund over the index is exclusively generated by the premiums from the sales of options. In classic ‘Buy Write' strategies there is always a residual risk that these options will be exercised. This risk is limited through an innovative strategy that is implemented in the fund: Options are sold daily with strikes prices that are systematically adjusted in accordance with market conditions.
Harewood Covered European Equity has witnessed growing international success from investors: Assets under management went from 11 million Euros, in early 2008, to more than 400 million Euros in the beginning of December 2009.
Legal form: UCITS III, PEA eligible
ISIN code (share A): FR0010370478
Bloomberg code (share A): HACVERQ FP
Management Company: Harewood Asset Management (BNP Paribas group)
Benchmark index: DJ Eurostoxx 50
Type of underlying: Equity index
*at 07 December 2009
Harewood Asset Management is an investment management company, 100% owned by BNP Paribas. Established in 2004, Harewood AM combines its asset management expertise with the skills of BNP Paribas' Corporate and Investment Bank (CIB). Harewood Asset Management distinguishes itself through innovative solutions capitalizing on CIB's expertise in: quantitative management, option-based strategies and derivative assets from market activities such as volatility, correlation and dividends.
This capacity for innovation has been rewarded by the “Prix de l'Innovation des Placements Financiers La Tribune – SGSS 2009”.
About BNP Paribas Corporate and Investment Banking
BNP Paribas Corporate and Investment banking division (https://cib.bnpparibas.com/) has almost 16,000 employees, deployed in 53 countries around the world. BNP Paribas CIB excels in three fundamental sectors in particular:
Derivatives - it is one of the leading global players in rates, credit, forex, commodity and equity derivatives
Capital markets - it is amongst the top ten Euro houses for both ECM and DCM (bond issues, securitization, convertibles and shares).
Structured finance - it is amongst the world leaders for acquisition, export, project and commodity finance.