The higher the equity ratio, the higher the expected return. On the other hand, higher fluctuations in value must also be expected, since there are always setbacks on the stock market, as the recent sharp market correction triggered by Corona has shown.
Two principles are therefore important:
The longer the investment horizon, the more time there is to tolerate any fluctuations in value and temporary falls in value. Securities investments with a higher equity ratio make it possible to profit from their higher return potential in the long term.
With securities investments, smart risk management is the key to robust results. A risk-optimised and diversified composition of the securities portfolio reduces fluctuations in value without, however, limiting the return potential.
OLZ pension funds are risk-optimised and therefore subject to lower fluctuations in value.
The OLZ investment strategy focuses on reducing the risk of fluctuations in value. Only equities and bonds with risk characteristics that reduce the overall portfolio risk (volatility) of the respective fund are selected. Compared to conventional strategies or passive ETFs, in which the risk characteristics of the individual securities do not play a role, a higher equity quota can be selected with the OLZ implementation for the same risk. The risk of the "OLZ Smart Invest 65 ESG", for example, corresponds to the indexed implementation of a Pictet BVG-40 portfolio with an equity component of 40%. The risk of the "OLZ Equity World Optimised ESG" is approx. 35% lower than that of an index fund or ETF that replicates the MSCI World Index. The following chart shows this as an example.