We are celebrating one year of OLZ Equity Switzerland Small & Mid Cap Optimized ESG

Christmas is once again around the corner, filling people with anticipation for a peaceful celebration. However, at OLZ, we are celebrating a bit earlier this year because the OLZ Equity Switzerland Small & Mid Cap Optimized ESG (ISIN CH1183522353) turned one year old on December 15, 2023. The reason for joy among our investors lies not only in the achieved return of 7.9%¹ but also in the smoother approach the fund took to reach its goal. During the same period, the SPI Extra Index delivered a return of 4.6%, but this Swiss Mid and Small Cap benchmark experienced significantly more ups and downs. With a volatility of 12.9%, the benchmark index fluctuated more than the OLZ fund, which had only 9.5% volatility. Moreover, the SPI Extra temporarily suffered a theoretical maximum loss of -14.1%, while the OLZ Small & Mid Cap fund was able to minimize it to -8.2%. Thus, the OLZ fund concluded its first year with a risk-adjusted return (Sharpe Ratio) of 0.83, while the SPI Extra only achieved a Sharpe Ratio of 0.36 during this period.

In addition to these return and risk metrics, the OLZ fund also excelled in terms of sustainability criteria. Our strategy raised the MSCI ESG Score of the benchmark from 6.9 to 7.4, earning it an ESG AA rating. At the same time, the CO2 intensity (Scope 1 & 2) was strongly reduced from 32.6 to 19.9.

The OLZ Equity Switzerland Small & Mid Cap Optimized ESG also outperformed the broader Swiss market index SPI. The OLZ strategy achieved a strong outperformance against this large-cap-heavy benchmark (return: 7.9% vs. 2.9%), even reducing the risk (volatility: 9.5% vs. 11.1%) - despite focusing on medium-sized and smaller companies. Hence, the OLZ fund was able to achieve its goal of minimizing volatility, even in comparison to the benchmark dominated by the three heavyweights Nestlé, Roche, and Novartis, while avoiding the severe concentration risk of the index.

Even after a successful first year, the explanatory power of the data is naturally limited due to the fund's young history. Nevertheless, it is evident that through OLZ Minimum Risk Optimization, attractive returns can be achieved with significantly reduced risk, all while improving the sustainability profile. Therefore, for some prospective investors of OLZ Equity Switzerland Small & Mid Cap Optimized ESG, this year's festive message might be - 'All I want for Christmas is you!'

¹ Investment period 15.12.2022 – 14.12.2023