Longchamp Equity Dividend Europe 2028 Fund

Strategy Overview

The Longchamp Longchamp Equity Dividend Europe 2028 Fund’s objective is to take advantage of the long term dividend maturities discount in Europe. 

Indeed, dividend markets often present significant discounts that are misaligned with the strong fundamentals of selected indices. The Fund seeks to take advantage of these market inefficiencies, providing the potential for enhanced returns. The Fund targets dividends from the SX5E index for the years 2026, 2027, and 2028. 

The Fund employs a thoughtful approach to maturity allocation: one third of the portfolio will expire at the end of 2026, with the expiry of the December 2026 contracts, and another third will expire at the end of 2027 with the expiry of the December 2027 contracts, and the last third will expire at the end of 2028 with the expiry of the December 2028 contracts. By distributing investments across 2026, 2027, and 2028, we mitigate risk and optimize potential returns. This strategy avoids concentrating risk in a single year (e.g. 2020), fostering a balanced and sustainable growth trajectory.

The Longchamp Equity Dividend Europe 2028 Fund offers the following advantages : 

  • Access to an asset class traditionally reserved for institutional investors (traded contracts are dividend futures)
  • Dividend market offering significant discounts that are out of step with the solid fundamentals of the selected indices
  • Natural hedge against inflation since dividends are calculated on nominal earnings, which tend to increase when prices rise
  • Increased share buybacks are good for dividends, as the reduce the number of share outstanding and therefore support dividends per share
  • Companies are led to increase their dividends in periods of high interest rates to make their shares attractive to investors. 
 
The Longchamp Equity Dividend Europe 2028 Fund invests in French Government Bonds 3Y, with an exposure to SX5E dividends via a Total Return Swap. term

Funds Facts

ISIN Code:

FR001400HTJ5

Investment Manager:

Longchamp Asset Management SAS

Regulatory Category:

French RAIF
FPS (Fonds Professionnel Spécialisé), regulated as an AIF under AIFMD

Legal Structure: 

FCP (Fonds Commun de Placement)

Domicile:

France

Depositary & Custodian:

Société Générale Securities Services

Administrator:

Société Générale Securities Services

Auditor:

PwC

Dealing Frequency:

Weekly

Launch Date:

12 May 2023

Reference Currency:

EUR

Distribution Policy:

Accumulation

Management Fees:

0.8%

Expected Returns (net of fees):

10%-11%

Redemptions:

Automatic partial redemptions in thirds by reduction of units at the initiative of the Management Company: 1/3 at the end of December 2026; 1/3 end of December 2027; 1/3 end of December 2028. 

No exit fees are applied to automatic redemptions.

The Fund will be liquidated at the end of the last partial redemption.

Liquidity and Redemption Fees:

Redemptions are possible on a weekly basis – a 2% redemption fee will appy. 

FR001400HTJ5

Performance as of 2024-02-23

NAV

1 147,50 €

YTD

+4,55%

MTD

+2,34%

3 YEARS

-

LTD

+13,85%

Past performance is not an indicator of future performance.

Structured Products Expertise

Derivatives and structured products are one of Longchamp AM’s main areas of expertise. We constantly look at market dislocations coming from structured products issuance on indices and single stocks.

One of the parameters we focus on is dividends futures, whose prices tend to be undervalued. Indeed, hedging of structured products, such as well-known Autocalls, gives bank a long exposure to dividends, a risk that they want to give away at discounted prices. During equity market crashes, this exposure can become too big so that investors, i.e. Longchamp AM, have the opportunity to buy dividends at very low costs.

Our offering :

Industry Oversight
  • We trade Autocalls products with 25 counterparties, enabling us to have access to their axes, especially in dividends futures.

Independence in Strategy Selection
  • Our approach is characterized by impartial counterparty selection, driven by a rigorous evaluation process. By identifying the most promising candidates and discarding less relevant options, we create portfolios that truly align with our client’s goals.

Risk Management
  • Risk management is a core principle embedded in our portfolio construction and management. Our strategy involves a blend of proprietary research and insights from prominent financial institutions, ensuring a holistic approach to risk mitigation.

Active Management
  • Our continuous monitoring framework leads us to adapt portfolios swiftly in response to changing market dynamics and emerging opportunities, maximizing returns while minimizing risk.

Moreover, alongside classical valuation metrics, Longchamp AM has developed proprietary metrics that offer a deeper understanding of strategy behaviors. This enables us to provide unparalleled insights into the dynamics of our strategies.

Key Professionals

David Armstrong

President – Managing Director

David is Chief Executive Officer at Longchamp Asset Management, which he founded in 2013. Previously, he was a Managing Director at Morgan Stanley & Co. International Plc, heading the investment bank’s Funds and Fund Linked business globally. In particular, he was in charge of the FundLogic UCITS Platform and served as President of the French asset management company, FundLogic SAS. Prior to joining Morgan Stanley, David had spent fourteen years within the Global Equity and Derivatives Solutions division at Société Générale. After joining the group in Paris, David moved to Milan to head the global capital markets operations including all Equity and Fixed Income activities. He also chaired the Italian alternative asset management company, Lyxor SGR. Thereafter, he moved to New York to head up Structured Products Sales for the Americas. David holds a master’s degree in Business Administration from EDHEC, Lille, France.


Lorenc Golemi

Head of Financial Engineering and Chief Risk Officer

Lorenc is the Chief Risk Officer at Longchamp AM. Before joining Longchamp AM, Lorenc worked in consultancy and advisory in investment banking and asset management. Previously he worked as Portfolio Manager, Risk Manager and Financial Engineer at UBS AM, CommerzBank and Dresdner Kleinwort Benson. He was in charge of systematic strategies and risk management of volatility and absolute return funds. Lorenc holds an Engineer degree in computer science and a master’s degree in applied mathematics. 


Romain Baumé

Private Wealth Manager

Romain is a Private Wealth Manager at Longchamp AM. He is dedicated to developing wealth management mandates. Previously, Romain worked at Indosuez Wealth Management in the Advisory team. He managed cross-assets portfolios, developed derivatives solutions for professional clients and conducted investment committees. Romain holds a master’s degree in Corporate Finance from the Toulouse Business School.