In an environment marked by shifting correlations, macro uncertainty and episodic volatility, traditional portfolio constructions are facing increasing limitations. The diversification benefits of equities and bonds have become less reliable, prompting investors to seek new sources of return.
What solutions are there for investors seeking for steady returns in an increasingly complex market environment?
Our objective is to offer investors a solution that targets resilient risk-adjusted returns across market cycles, with structurally low correlation to traditional asset classes.
Diversification is central to this approach. Rather than relying on a single source of performance, we combine several alternative strategies—each with distinct return drivers. By diversifying sources of alpha and reducing dependence on market direction, the strategy aims at robustness across different market environments, and particularly during periods of stress when traditional diversification may weaken.
The portfolio is built around three complementary families of strategies, each with a clearly defined role:
All strategies are developed and implemented internally and combined within a single, centralised trading book. This is a key parameter for us—as it enhances risk oversight, execution efficiency and liquidity management—, as well as for investors— as it is more cost efficient.
A key feature of the approach is dynamic allocation: we actively adjust the respective strategy weights based on the prevailing market regime—risk-on, transitory or risk-off. We use a combination of quantitative indicators and qualitative assessment to make this decision. This flexibility is designed to enhance the portfolio’s risk-return profile.
Market conditions are increasingly dictated by macro uncertainty, geopolitical tensions and shifting monetary regimes, leading to more frequent and less predictable changes.
In this context, building robust portfolios requires both diversification and adaptability. Our multi-strategy approach seeks to provide both.
Recent market developments illustrate this dynamic in practice, as the portfolio has behaved in line with our expectations— each strategy contributing to the overall result:
That said, no allocation framework is immune to all environments. Periods of synchronised market dislocations, reduced liquidity or strategy crowding can affect strategies simultaneously. This is why diversification, disciplined risk management and continuous reassessment remain essential components of the investment process.
In recent years, traditional portfolio constructions -- most notably the classic 60/40 equity/bond allocation -- have served investors well. They are simple, have been effective over the long term, and have historically offered diversification. However, the increased correlation between equities and bonds fundamentally alters the effectiveness of traditional portfolio construction. How can we enhance diversification beyond the traditional bonds and equities asset class allocation?
Get information faster with a single click