Update on… ECHIQUIER CREDIT SRI EUROPE | April 2026
Uriel Saragusti, Fund Manager and Matthieu Durandeau, Analyst and Fund Manager, Echiquier Credit SRI Europe, La Financière de l’Échiquier (LFDE)
2025 was marked by a demanding market environment characterised by persistent geopolitical tensions, monetary policy divergence between the United States and the euro area, and a high volume of bond issuance. In Europe, the steepening of the yield curve weighed on longer maturities, while bond markets nonetheless delivered solid performances supported by carry and the easing of risk premiums.[1] Against this backdrop, Echiquier Credit SRI Europe delivered a positive return of 2.47% in 2025 (A units, net of fees). In the first quarter of 2026, the conflict in the Middle East and the effective closure of the Strait of Hormuz led to a spike in yields and credit spreads. Inflation risk, which had remained contained in the euro area until February, has once again come to the fore.
Operations
In 2025, whether in relation to Germany’s public spending plan or uncertainties surrounding US tariffs, the fund demonstrated its ability to adapt and remain resilient in the face of external shocks. These conditions led to fluctuations in both yields and credit spreads, the two key drivers of corporate bond valuations.
The fund’s activity was particularly strong over the year, both in terms of interest rate positioning and credit allocation. Interest rate sensitivity was actively managed, helping to mitigate the impact of rising yields, while portfolio turnover was notably high, reflecting a highly dynamic management approach.
The selection of investment grade bonds[2] was well positioned to benefit from movements in risk premiums, particularly their easing from April to December. In addition, the narrowing of high yield spreads made a significant contribution to performance: the fund benefited from this trend through its allocation to higher-yielding instruments – high yield bonds and subordinated debt[3] – which represented an average of 18% of assets[4] over the year. Investments in hybrid debt – subordinated bonds issued by non-financial corporates – such as those of Veolia and Vodafone, also contributed to performance. This segment benefited from favourable technical conditions and a gradual improvement in perceived risk.
Management was also highly active in the primary market, which remained exceptionally well-supplied in 2025. The abundance of new issues enabled regular arbitrage between existing holdings and new tranches, often issued with attractive concessions. This dynamic provided compelling entry points into high-quality issuers such as Legrand and Klépierre.
Investment strategy
The fund’s investment strategy is primarily focused on investment grade debt with intermediate maturities, giving the portfolio a high level of credit quality: its average rating is BBB+,[5] placing it in the upper tier of the investment grade universe.
At present, unitholders are benefiting from an environment of elevated yields combined with risk premiums close to their historical averages – a configuration that, in our view, offers attractive return prospects while maintaining a robust average credit rating.
Finally, the fund retains the flexibility to increase its exposure to riskier assets should market conditions become more rewarding, a move that has already been partially implemented since mid-March 2026.
Disclaimers: These data, securities and opinions are provided for information purposes only and do not constitute an offer to buy or sell a security, investment advice or financial analysis. Past performance is not an indication of future performance. The fund is primarily exposed to the risk of capital loss, interest rate risk, credit risk, sustainability risk and discretionary management risk.
For more information on the characteristics, risks, and costs of these funds, and before investing, please read the regulatory documents available on our website at www.lfde.com.
[1] Additional return required by an investor to compensate for a higher-than-average level of risk.
[2] Securities with credit ratings ranging from AAA to BBB- according to Standard & Poor’s.
[3] A bond that, in the event of issuer default, is repaid after senior creditors.
[4] Bloomberg portfolio data, 2025 annual average.
[5] At 28/02/2026