Our newest fund "OLZ Equity Switzerland Small & Mid Cap Optimized ESG" (ISIN: CH1183522353) has had a successful start and was able to achieve the investment goals set for it.
In the eight months since its launch on 15.12.2022, the fund has generated a cumulative return of 7.5% (as of 18.07.2023) with an annualized volatility of only 10.0%. This puts our fund almost on par with the SPI Extra (7.8%), while achieving these returns with significantly lower risk (volatility SPI Extra: 13.6%). This also is reflected in a significant reduction of the maximum loss from -6.6% to -4.5%. The risk-adjusted return is therefore clearly above that of the benchmark index (Sharpe ratio 1.3 vs. 1.0), underscoring the efficiency of the risk-optimized OLZ portfolio.
OLZ Equity Switzerland Small & Mid Cap Optimized ESG also generated clear added value in comparison with the SPI, which includes the 20 largest companies on the Swiss stock exchange in addition to the SPI Extra securities. The OLZ strategy significantly outperformed this large-cap-heavy benchmark (7.5% vs. 3.1%) while reducing risk despite its focus on mid-sized and smaller companies (volatility: 10.0% vs. 12.0%). Our portfolio optimization thus allows us to achieve a lower volatility than the benchmark index, which is dominated by index heavyweights Nestlé, Roche and Novartis, while avoiding this significant concentration risk.
Through smart integration of sustainability criteria, our fund clearly outperforms its benchmark index SPI Extra in this respect: The MSCI ESG Score was increased from 7.1 to 7.4, while the CO2 intensity (Scope 1 & 2) was significantly reduced from 36.5 to 22.6.
Although the fund history is of course still very short and the statistical power of the data is therefore limited, the desired portfolio characteristics and the added value of OLZ Minimum Risk Optimization are nevertheless evident: Attractive returns are achieved with significantly reduced risk, in line with an improved sustainability profile. Thus, OLZ Equity Switzerland Small & Mid Cap Optimized ESG offers our investors the opportunity to benefit from the return potential of Swiss mid- and small-cap stocks without having to take a structurally higher risk.
Update as of 30.09.2023:
In the last two and a half months, negative price developments have dominated the Swiss equity market. Since its launch, OLZ Equity Switzerland Small & Mid Cap Optimized ESG now has a cumulative return of 4.1%, while the SPI Extra is up only 3.1%. Our fund was thus able to outperform the benchmark, and still at lower risk (annualized volatility of 9.4% vs. 12.7%). The maximum loss was also significantly reduced from -9.3% to -5.4%.
