Exane Equity Select Europe Fund

Investment rationale

The fund is a core European equity allocation, using a “core portfolio” approach focused on European equities and neutralising non-stock-specific risks relative to the benchmark. It is a UCITS ETF with daily dealing, SFDR Article 8 classification, and a recommended investment horizon of 5 years. The fund has a risk indicator of 4 out of 7, described as medium risk, and is intended for retail investors through the ETF share class. It uses active stock selection within sectors while maintaining a neutral stance on other benchmark-related risks.

2026-08-31

How the strategy works

The objective is to outperform the MSCI Europe Net TR over the recommended investment horizon. The fund invests mainly in European equities, with the same country coverage as the MSCI Europe, while allowing ancillary exposure to shares issued by companies located in another OECD country; positions are mostly taken through direct equity purchases, with swaps, CFDs, forward contracts or futures also permitted for efficient portfolio management. The overall exposure to the investment universe is intended to be 100% of net assets, with limited and transitory cash positions, and money market instruments or European UCITS money market funds may be used for cash management. The benchmark is the MSCI Europe Net TR, used to assess risk profile and relative performance, while the portfolio may deviate significantly from it; the ETF share class is accumulating, denominated in EUR, and the fund uses the commitment approach for global exposure.

2026-08-31

Investment philosophy

• The portfolio follows an actively managed stock-picking process focused on European equities, with strongest medium-term convictions derived from sector expertise and implemented as a “core portfolio” strategy.

• Stock selection is based on analysis of company fundamentals, absolute and relative strengths within sectors, and the gap between estimated intrinsic value and market value; ESG considerations are integrated through external and internal research.

• Portfolio construction seeks to maximise stock-picking impact within sectors by concentrating holdings relative to the benchmark while controlling biases versus the MSCI Europe on sector allocation, country, market capitalisation and leverage.

• As of 31/08/2026, the largest positions were ASML Holding (5.5%), Roche Holding (3.2%), Enel (3.0%), Neste (2.8%), Galp Energia (2.6%), Banco Santander (2.5%), UniCredit (2.5%), DNB (2.1%), Reckitt Benckiser (2.1%) and Sartorius preference shares (2.0%).

• Sector weights were kept close to the index, including Industrials 14.4% vs 15.2%, Banks 14.4% vs 15.2%, Health Care 12.1% vs 12.0% and Technology 10.0% vs 9.9%, while active share by stock was led by Neste, Enel, Sartorius, DNB and Reckitt Benckiser.

2026-08-31

Management team

The fund management team comprises Eric Lauri and Richard Pandevant, with a “Multi PMs model.” Eric Lauri is Deputy Chief Executive Officer of Exane Asset Management and a director and conducting person of the management company.

2026-08-31

Distinctive features

The fund uses a benchmark-aware European equity process that combines concentrated stock selection within sectors with a neutral stance on other risks relative to MSCI Europe. It is offered as a UCITS ETF with daily liquidity, no subscription or redemption fees on the ETF share class, and a fixed fee of 0.65% plus a performance fee of 15% of annual benchmark outperformance, with past underperformance compensation. The performance fee may be payable even when performance is negative. Intermediary trading costs may also apply. At 31 August 2026, the portfolio had ESG analysis coverage of 100%, a lower ESG risk score than the index, and a sustainable investment rate of 30.0%. AUM was €788 million at that date, and the fund was registered across multiple European countries plus Switzerland.

2026-08-31

Risks

The fund has a risk indicator of 4 out of 7, corresponding to a medium-risk class. The main risks are Capital Risk, Equity Risk, Risks related to mid-cap equities, Currency Risk, Counterparty Risk, Discretionary Management Risk, Liquidity Risk and Sustainability Risk. Structurally, risk is driven by its equity exposure, active stock selection, permitted use of derivatives such as swaps, CFDs, forwards and futures, and limited but possible exposure to non-European OECD equities and money market instruments. The ETF structure also carries secondary market trading and liquidity risk; market prices can deviate from NAV and trading may be affected by market disruption events.

2026-08-31

Asset manager

The management company is Exane Asset Management, located at 11 rue Scribe, 75009 Paris, France. It is authorised by the French Financial Markets Authority under number GP 01-015 and is a SAS with capital of €3,000,000. Exane Asset Management was incorporated on 20 February 2001 in France and later transformed into a simplified joint-stock company in 2009. It also acts as management company of Exane Funds 1.

2026-08-31

Performance commentary

Energy was the strongest contributor, led by Galp and Neste, followed by insurance through Talanx, banks through DNB and Erste Group, and technology through Adyen and SAP; consumer discretionary was the main detractor, notably Kering. The manager highlights that sector specialists handled the end of the first-half 2026 earnings season well, which helped relative results. Positioning changes during the month included selling LVMH and buying Kering in luxury, selling Heineken and buying Diageo in consumer staples, and initiating ERG in utilities.

2026-09-30