Zur Haupt-Navigation Direkt zum Inhalt

Performance Commentary

2nd quarter 2020

Equity World

What got off to a brilliant start at the end of Q1 was continued impressively in Q2: the market recovery from the corona crash continued unabated. Since its low in March, the MSCI World Index has risen by around 35% (in USD). In June, numerous key indices were only a few percentage points below their historic highs.

The central banks' monetary policy safety net, the generous economic stimulus packages of governments and investors' hopes of a V-shaped recovery of the economy gave share prices the necessary boost. The price fireworks were accompanied by declining but still above-average volatility. Cyclical sectors and the more cyclically sensitive stocks within the respective sectors were clearly ahead of defensive stocks. The technology and communications services sector (once again) was the strongest performer. Large and mega caps in particular outperformed small and mid caps, as has been the case for several years.

In this environment, our risk-based strategies could not keep up with the capital-weighted benchmarks. Both the declining volatility level and our underweight in cyclical stocks and mega caps slowed down the race to catch up.

Although the extent of the underperformance could lead to some uncertainty among our investors, we are neither surprised nor concerned about the current situation. The market dynamics of the last quarter were very unfavorable for risk-based strategies - a fact that we have had to experience several times in the past. In the long term, however, we remain convinced of the added value of our concept.

The CHF reacted to the easing situation and on average depreciated somewhat. The share classes without currency hedging therefore performed slightly better than the classes with CHF hedging.

Data as per 30.06.2020 in reference currency of the funds Class Currency Inception date Price Return June

OLZ incl. fees, Benchmark excl. fees

Return 2020

OLZ incl. fees, Benchmark excl. fees

Return (cum.) since inception

OLZ incl. fees, Benchmark excl. fees

Risk Volatility

since inception

Sharpe Ratio

Risk/Return, since inception

Global equities
Data as per 30.06.2020 in reference currency of the funds
Class C Currency CHF Inception date 31.01.2014 Price 141.25
Return June
-0.77 %
1.24 %
Return 2020
-15.36 %
-7.79 %
Return (cum.) since inception
40.86 %
62.98 %
Risk Volatility
10.75 %
14.10 %
Sharpe Ratio
0.51
0.56
Data as per 30.06.2020 in reference currency of the funds
MSCI World Index (85% CHF hedged)
Class I-A Currency CHF Inception date 17.12.2014 Price 12'949.57
Return June
-0.36 %
2.11 %
Return 2020
-12.94 %
-6.26 %
Return (cum.) since inception
20.32 %
37.38 %
Risk Volatility
9.02 %
13.56 %
Sharpe Ratio
0.32
0.39
Global equities ex CH
Data as per 30.06.2020 in reference currency of the funds
MSCI World ex Switzerland Index
Class I-C Currency CHF Inception date 15.04.2014 Price 14'591.55
Return June
-0.68 %
1.23 %
Return 2020
-15.36 %
-7.92 %
Return (cum.) since inception
46.78 %
63.23 %
Risk Volatility
11.10 %
14.54 %
Sharpe Ratio
0.54
0.54
Data as per 30.06.2020 in reference currency of the funds
MSCI World ex Switzerland Index (85% CHF hedged)
Class I-A Currency CHF Inception date 27.06.2014 Price 1'267.11
Return June
-0.28 %
2.12 %
Return 2020
-13.25 %
-6.34 %
Return (cum.) since inception
32.40 %
39.63 %
Risk Volatility
9.13 %
13.19 %
Sharpe Ratio
0.53
0.43
Global equities ex CH (exempt from US/JP withholding tax)
Data as per 30.06.2020 in reference currency of the funds
MSCI World ex Switzerland Index
Class I-C Currency CHF Inception date 09.11.2017 Price 15'052.65
Return June
-0.68 %
1.23 %
Return 2020
-15.21 %
-7.92 %
Return (cum.) since inception
-2.90 %
7.31 %
Risk Volatility
13.32 %
17.32 %
Sharpe Ratio
-
-
Data as per 30.06.2020 in reference currency of the funds
MSCI World ex Switzerland Index (85% CHF hedged)
Class I-A Currency CHF Inception date 09.11.2017 Price 1'312.54
Return June
-0.26 %
2.12 %
Return 2020
-12.96 %
-6.34 %
Return (cum.) since inception
-1.11 %
7.15 %
Risk Volatility
11.30 %
16.89 %
Sharpe Ratio
-
-
Pension solutions for pillar 3a and vested benefits assets
Data as per 30.06.2020 in reference currency of the funds
MSCI World Index (85% CHF hedged)
Class IH Currency CHF Inception date 24.10.2019 Price 88.52
Return June
-0.36 %
2.11 %
Return 2020
-12.96 %
-6.26 %
Return (cum.) since inception
-11.48 %
-1.09 %
Risk Volatility
18.07 %
25.59 %
Sharpe Ratio
-
-

Equity Emerging Markets

Although emerging markets such as Brazil, Russia and India became epicenters of the Covid-19 pandemic in recent months, their financial markets have also recovered somewhat from the March shock. Not quite as strong as the US stock indices, for example, but remarkable in view of the blatant case numbers. This is also true when one considers that government stimulus packages are likely to be rather small in the emerging markets due to a lack of funds or creditworthiness.

Similar to the industrialised countries, cyclical growth stocks were in demand and volatility also eased somewhat in the emerging markets universe. As elsewhere, large-capitalized companies were particularly favored by investors. Our model, on the other hand, favors a higher proportion of mid-cap companies than the benchmark index. Typically, our risk-based fund underperformed its benchmark in this strong market phase.

As already stressed in the commentary on "Equity World", the result is not surprising in this investment universe either. In the long term, and especially in the current economic and political environment, a risk-conscious strategy can deliver added value.

Data as per 30.06.2020 in reference currency of the funds Class Currency Inception date Price Return June

OLZ incl. fees, Benchmark excl. fees

Return 2020

OLZ incl. fees, Benchmark excl. fees

Return (cum.) since inception

OLZ incl. fees, Benchmark excl. fees

Risk Volatility

since inception

Sharpe Ratio

Risk/Return, since inception

Emerging markets equities
Data as per 30.06.2020 in reference currency of the funds
MSCI Emerging Markets Index
Class I Currency CHF Inception date 22.08.2012 Price 925.36
Return June
2.19 %
5.88 %
Return 2020
-12.57 %
-11.72 %
Return (cum.) since inception
-7.46 %
20.94 %
Risk Volatility
11.86 %
14.60 %
Sharpe Ratio
-0.06
0.20

Equity Switzerland

The Swiss equity market also continued to recover and is now almost back to the level of last December. Cyclical sectors such as IT, industrials and financials in particular made significant gains. Volatility also decreased.

In Q2, the financial market environment provided little tailwind for our risk-based strategy in Switzerland as well. Although the fund was also clearly in positive territory and made up a large part of its annual loss, it still lagged behind the benchmark in the final accounts.

One of the main reasons for the underperformance was the underweight in highly cyclical, higher-risk stocks. In general, stock selection within sectors had a greater impact on the performance of our fund than sector allocation. It is not surprising that riskier stocks are usually sought after when the market recovers. The three defensive index heavyweights Nestlé, Novartis and Roche also underperformed the SPI. The underweight of Roche and especially the exclusion of Novartis had a positive impact on performance.

Again, given the market conditions, the underperformance is relatively easy to explain and is no cause for concern.

Data as per 30.06.2020 in reference currency of the funds Class Currency Inception date Price Return June

OLZ incl. fees, Benchmark excl. fees

Return 2020

OLZ incl. fees, Benchmark excl. fees

Return (cum.) since inception

OLZ incl. fees, Benchmark excl. fees

Risk Volatility

since inception

Sharpe Ratio

Risk/Return, since inception

Swiss Equities
Data as per 30.06.2020 in reference currency of the funds
Swiss Performance Index (TR)
Class IR Currency CHF Inception date 20.12.2010 Price 2'210.11
Return June
0.58 %
1.55 %
Return 2020
-7.15 %
-3.13 %
Return (cum.) since inception
137.54 %
112.47 %
Risk Volatility
10.25 %
11.19 %
Sharpe Ratio
0.94
0.75

Equity Europe ex Switzerland

In Europe the picture is the same as in the rest of the world. Governments and the ECB launched generous economic stimulus and support measures, thereby initiating a remarkable rebound led by cyclical growth stocks and mega caps. Inevitably, this meant that even in this investment universe, our risk-based strategy failed to keep pace with the capital-weighted benchmark.

In this strongly positive market phase, performance was mainly depressed by the less favorable stock selection (within sectors and countries).

There was little movement on the currency side. The two classes, with and without CHF hedging, ended the quarter virtually level.

Data as per 30.06.2020 in reference currency of the funds Class Currency Inception date Price Return June

OLZ incl. fees, Benchmark excl. fees

Return 2020

OLZ incl. fees, Benchmark excl. fees

Return (cum.) since inception

OLZ incl. fees, Benchmark excl. fees

Risk Volatility

since inception

Sharpe Ratio

Risk/Return, since inception

European Equities ex CH
Data as per 30.06.2020 in reference currency of the funds
MSCI Europe ex CH Index
Class I-C Currency CHF Inception date 15.09.2015 Price 946.81
Return June
0.40 %
2.84 %
Return 2020
-15.12 %
-16.54 %
Return (cum.) since inception
-2.04 %
7.18 %
Risk Volatility
12.69 %
15.91 %
Sharpe Ratio
-0.01
0.13
Data as per 30.06.2020 in reference currency of the funds
MSCI Europe ex CH (CHF hedged) Index
Class I-A Currency CHF Inception date 15.09.2015 Price 103.36
Return June
1.09 %
3.41 %
Return 2020
-11.17 %
-13.45 %
Return (cum.) since inception
6.92 %
14.54 %
Risk Volatility
10.38 %
13.64 %
Sharpe Ratio
0.15
0.25

Equity USA

While in March all eyes were still on the corona wave in Europe, the USA has now developed into a hotspot. Despite a further increase in the number of cases, measures to contain it are being eased. The government and the Federal Reserve are also on the spot and are trying to contain the economic damage of the lockdown. Wall Street is naturally pleased about this. The S&P 500 delivered one of its best quarters.

Technology stocks (heavily underweighted in our fund) also gained most in the US. Especially the very big players such as Apple, Citrix and Alphabet were able to benefit. The Nasdaq even reached a new all-time high, reflecting the high expectations of profit growth and the accelerated digitalisation of the economy. Since technology stocks have a relatively large weighting in the US market, the significant underperformance of our strategy is not surprising.

The underweight in cyclically sensitive or, as in this case, growth-oriented stocks, is typical for a risk-based approach. Such stocks are generally riskier than the rest of the market and are therefore less favored by our model. Although the poor performance of our fund is unpleasant, it can certainly be explained by the characteristics of the investment strategy.

The USD changed only marginally against the CHF. The two classes with and without currency hedging are therefore very close together.

Data as per 30.06.2020 in reference currency of the funds Class Currency Inception date Price Return June

OLZ incl. fees, Benchmark excl. fees

Return 2020

OLZ incl. fees, Benchmark excl. fees

Return (cum.) since inception

OLZ incl. fees, Benchmark excl. fees

Risk Volatility

since inception

Sharpe Ratio

Risk/Return, since inception

Equities USA
Data as per 30.06.2020 in reference currency of the funds
Class P Currency USD Inception date 20.10.2016 Price 121.42
Return June
-1.44 %
2.24 %
Return 2020
-14.03 %
-2.45 %
Return (cum.) since inception
22.32 %
53.84 %
Risk Volatility
13.01 %
15.65 %
Sharpe Ratio
0.44
0.81
Data as per 30.06.2020 in reference currency of the funds
MSCI USA Index (95% CHF hedged)
Class PH Currency CHF Inception date 20.10.2016 Price 109.39
Return June
-1.68 %
2.05 %
Return 2020
-15.16 %
-3.61 %
Return (cum.) since inception
10.17 %
38.44 %
Risk Volatility
12.94 %
15.64 %
Sharpe Ratio
0.21
0.61

Foreign currency bonds (CHF hedged)

Even though the crisis sentiment from Q1 has evaporated and investors are turning back to riskier assets, government bonds continued to gain in Q2. The prospects of further monetary policy stimulus and even lower interest rates also allowed high-quality government bonds to gain slightly. In the US, for example, there is now talk of negative interest rates or even of direct control of the yield curve along the lines of the Japanese model. Inflation is still barely moving and thus leaves enough room for new monetary policy measures.

Our two foreign currency bond funds with medium (mid-term) and long (long-term) durations closed the quarter almost level with the benchmark. However, the somewhat lower duration and the outperformance of poorer-quality government bonds had a somewhat braking effect.

Data as per 30.06.2020 in reference currency of the funds Class Currency Inception date Price Return June

OLZ incl. fees, Benchmark excl. fees

Return 2020

OLZ incl. fees, Benchmark excl. fees

Return (cum.) since inception

OLZ incl. fees, Benchmark excl. fees

Risk Volatility

since inception

Sharpe Ratio

Risk/Return, since inception

Global bonds (CHF hedged)
Data as per 30.06.2020 in reference currency of the funds
Class I Currency CHF Inception date 17.04.2007 Price 1'346.39
Return June
-0.02 %
0.21 %
Return 2020
4.28 %
4.07 %
Return (cum.) since inception
50.09 %
47.15 %
Risk Volatility
4.32 %
3.08 %
Sharpe Ratio
0.72
0.96
Data as per 30.06.2020 in reference currency of the funds
Class I Currency CHF Inception date 01.07.2011 Price 977.77
Return June
-0.03 %
0.17 %
Return 2020
1.82 %
2.81 %
Return (cum.) since inception
3.84 %
10.05 %
Risk Volatility
1.47 %
1.48 %
Sharpe Ratio
0.28
0.72

Bonds CHF

In March, the flight to liquidity led to strong selling pressure and rising interest rates on high-quality CHF bonds. Once the markets have calmed down, these bonds are in demand again despite negative interest rates. This led to a falling interest rate level in Q2 and thus to a positive return.

The fund kept up relatively well with the market trend in Q2. Although the lower duration compared to the market index put some pressure on performance, this was largely offset by the better performance of debtors with lower ratings. In fact, compared to the market index, some government bonds are being replaced by securities of public or publicly controlled issuers with AA and A ratings.

Data as per 30.06.2020 in reference currency of the funds Class Currency Inception date Price Return June

OLZ incl. fees, Benchmark excl. fees

Return 2020

OLZ incl. fees, Benchmark excl. fees

Return (cum.) since inception

OLZ incl. fees, Benchmark excl. fees

Risk Volatility

since inception

Sharpe Ratio

Risk/Return, since inception

Bonds CHF
Data as per 30.06.2020 in reference currency of the funds
SBI AAA-BBB TR
Class I-A Currency CHF Inception date 01.07.2014 Price 1'016.70
Return June
0.28 %
0.18 %
Return 2020
-1.33 %
-0.48 %
Return (cum.) since inception
3.37 %
9.32 %
Risk Volatility
2.73 %
3.70 %
Sharpe Ratio
0.20
0.40

Mixed fund Smart Invest 65

Our mixed fund with 65% equities was not quite able to keep up with the benchmark index (with 40% equity exposure) in Q2. On the one hand, the risk-based equity components fell behind the benchmark due to the strong recovery, while on the other hand the benchmark index, with its lower debtor quality, benefited more from the easing situation on the bond market. In addition, the lower foreign currency ratio also had a somewhat negative impact on the performance of our fund.

The depreciation of the CHF and the better performance of risky investments (whether equities or bonds) are typical of a recovery after such a sharp correction as we saw in March. The underperformance of Q2 is therefore nothing unusual for a risk-based strategy.

Data as per 30.06.2020 in reference currency of the funds Class Currency Inception date Price Return June

OLZ incl. fees, Benchmark excl. fees

Return 2020

OLZ incl. fees, Benchmark excl. fees

Return (cum.) since inception

OLZ incl. fees, Benchmark excl. fees

Risk Volatility

since inception

Sharpe Ratio

Risk/Return, since inception

Mixed funds
Data as per 30.06.2020 in reference currency of the funds
Pictet BVG-40 Index
Class IR Currency CHF Inception date 19.05.2017 Price 99.52
Return June
0.25 %
0.80 %
Return 2020
-6.85 %
-2.53 %
Return (cum.) since inception
0.94 %
10.96 %
Risk Volatility
7.15 %
6.62 %
Sharpe Ratio
0.01
0.51
Pension solutions for pillar 3a and vested benefits assets
Data as per 30.06.2020 in reference currency of the funds
Pictet BVG-40 Index
Class I Currency CHF Inception date 03.11.2016 Price 108.09
Return June
0.27 %
0.80 %
Return 2020
-6.75 %
-2.53 %
Return (cum.) since inception
8.42 %
17.95 %
Risk Volatility
6.74 %
6.21 %
Sharpe Ratio
0.33
0.74

Mixed fund Smart Invest Dynamic

The mixed fund with dynamic allocation achieved only a relatively low positive performance in Q2. For a fund that can invest up to 100% in equities, such a result requires a more detailed explanation.

During the rebalancing in March, which unfortunately took place as planned only a few days before the market reached its low, the equity allocation was reduced from almost 100% to around 20%. In the following weeks, the financial markets experienced an impressive recovery. However, the market risk indicators continued to signal a very high risk situation, which was characterized by uncertainties at various levels. In the April rebalancing the equity allocation was reduced to 0%. Since then, the portfolio has been 100% invested in bonds. This allocation was confirmed in the subsequent rebalancings in May and June. The reason for this is the still very high level of risk in the market, even though the record performance of the equity markets makes such risks less obvious. In terms of asset allocation, the dynamic model measures the attractiveness of our risk-based equity and bond strategies. In the model estimates of April, May and June, the risk/return ratio of a 100% bond strategy was superior.

Looking back, it is interesting to note that our Equity World strategy has not outperformed the 100% bond strategy since mid-April. This may come as a surprise in such a strong equity quarter, but as we have explained in the previous comments, Q2 was characterized by a combination of less favourable effects for our equity approach. As a result, the performance of our equity funds was clearly below average. So a hypothetical 100% equity strategy at the April rebalancing would not have helped.

This very modest return in such a strong quarter can be explained by the unique V-shaped market dynamics, which are very difficult for a dynamic allocation model to capture. Added to this is the rather defensive orientation of the model. Unfortunately, the risk of a stock reduction at an unfavorable time has occurred. For investors who continue to focus on reducing portfolio risk in uncertain times, this approach offers an opportunity to do so in a systematic way. We understand the disappointment of investors. But in our dynamic strategy, patience and discipline are required to achieve long-term value.

Data as per 30.06.2020 in reference currency of the funds Class Currency Inception date Price Return June

OLZ incl. fees, Benchmark excl. fees

Return 2020

OLZ incl. fees, Benchmark excl. fees

Return (cum.) since inception

OLZ incl. fees, Benchmark excl. fees

Risk Volatility

since inception

Sharpe Ratio

Risk/Return, since inception

Mixed funds
Data as per 30.06.2020 in reference currency of the funds
User-defined benchmark (60% stocks)
Class IR Currency CHF Inception date 05.07.2018 Price 834.12
Return June
0.01 %
1.06 %
Return 2020
-20.76 %
-3.89 %
Return (cum.) since inception
-16.43 %
4.98 %
Risk Volatility
13.87 %
12.07 %
Sharpe Ratio
-
-
Data as per 30.06.2020 in reference currency of the funds
User-defined benchmark (60% stocks)
Class I Currency CHF Inception date 31.10.2019 Price 80.22
Return June
0.05 %
1.06 %
Return 2020
-20.59 %
-3.89 %
Return (cum.) since inception
-19.78 %
-2.01 %
Risk Volatility
21.51 %
16.67 %
Sharpe Ratio
-
-
Zum Footer Zur Startseite