The OLZ Dynamic Fund in the 2025 stress test

With increasing volatility on the global stock market, investor uncertainty has risen significantly this year. The main drivers here are the corrections on the US stock market in April, which has since lost 19.2% of its value. The VIX, which measures the implied volatility of the S&P 500, has also risen significantly to 60.13, indicating a sharp increase in risk.

The key question investors now have to ask themselves is: How should I structure my portfolio to respond to this changed market environment?

The concept of OLZ Equity World Dynamic 0-100 aims to manage the global equity allocation on a risk-based basis between 0% and 100%. This allows investors to participate in the long-term performance of the global equity market while reducing the risk of loss.

Since its launch in December 2023, OLZ Equity World Dynamic 0-100 has achieved this goal and outperformed a portfolio with a static equity allocation of 60% by 16 May 2025 by 7.2%. In particular, the significant corrections in April 2025 and the subsequent recovery enabled the Dynamic Fund to reduce its loss in value compared with a static equity allocation, thus passing its first test with flying colors.

OLZ Dynamic in the current market phase

The complex turbulence on global stock markets in 2025 was a stressful period for the OLZ Equity World Dynamic 0-100 Fund, during which the OLZ Dynamic model proved its worth:

Until mid-February, the markets were still in a clear upward trend – the OLZ Dynamic fund was invested 100% in equities throughout this phase.

Due to deteriorating US growth and inflation data and increased uncertainty regarding additional tariff announcements by US President Trump, volatility rose significantly on February 21, 2025. As a result, global stock markets corrected until the end of the first week of March. The volatile trend and increased risks prompted the OLZ Dynamic Fund to temporarily reduce its equity allocation.

During the subsequent brief upturn, the Dynamic Fund's equity allocation was increased back to 100%, although both the risk and trend components were close to their thresholds for a lower equity allocation.

Speculation in the run-up to Liberation Day caused volatility on the stock market to rise significantly again, prompting the Dynamic Fund to reduce its equity exposure once more. With an equity exposure of 75% on Liberation Day and a subsequent reduction to 0%, the drawdown after Liberation Day was significantly reduced.

Until the beginning of the fourth week of April, global stock markets trended sideways and suffered repeated setbacks. The markets then recovered and rose significantly from April 21 onwards. As a result, the equity allocation in the Dynamic Fund was gradually increased to 100%.

So far, 2025 has shown that the OLZ Dynamic Fund delivers what it promises: skimming the equity premium in low-risk phases and systematic risk reduction in high-risk phases.

Year-to-date, the OLZ Dynamic Fund has reduced its drawdown compared to the MSCI World from -21.6% to -13.1% and is thus even slightly above the drawdown of a static 60/40 portfolio – consisting of 60% MSCI World & 40% Saron – at -13.4%. At the same time, the performance of the OLZ Dynamic Fund is in line with that of the MSCI World and the static 60/40 portfolio: as of May 16, 2025, the YTD performance of the OLZ Dynamic Fund was -2.6% compared to -3.3% for the MSCI World and -1.7% for the static 60/40 portfolio. This means that the OLZ Dynamic Fund generates significant added value on a risk-adjusted basis.

Conclusion

The OLZ Equity World Dynamic Fund offers an innovative and systematic approach for all investors who want to respond flexibly and transparently to changing market conditions.

Developments in 2025 to date have clearly shown that investors can rely on the OLZ Dynamic Fund model: Thanks to risk-based management of the equity allocation, the fund was not only able to reduce losses in April compared with a static 60/40 allocation, but also participate in the subsequent market recovery. The fund has thus passed its first test with flying colors.

The product in one sentence: Our Dynamic 0-100 enables the strategic, rule-based, and dynamically smart management of bandwidths – on a daily basis.