Optimal capital allocation

All our asset allocation solutions are based on three key elements: our convictions, our active and dynamic management, which is based on continuous analysis of market environments, and portfolio diversification. We believe that the optimal allocation of invested capital is achieved by the right combination of these three components.

Nadège Dufosse
Global Head of Multi-Asset
The fact that we can rely on the expertise of Candriam's recognised specialists, in particular our ESG analysis team, is a guarantee of credibility.

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A 360° vision

All our decisions are based on our fundamental analysis, which we use to define our scenarios and which we complement with quantitative and technical analysis to support our choices. We take particular care to approach the market from different angles, integrating all our expertise.

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Integrating ESG

We take ESG criteria into account at the level of the underlying assets, through strategy selection or through our direct investments, and the type of instruments we favour. This asset mix allows us to tailor our portfolios to the ESG profiles requested by our clients.

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Meeting a wide range of requirements

Profiled ranges with or without an ESG approach, flexible funds, multi-strategy absolute return funds with or without a systematic approach: the wide variety of our offering means that we can propose investment solutions that are adapted to the demands of our clients in terms of investment horizons, returns and risk profiles.

Figures are worth a thousand words. 

€52bn

AuM

4

complementary sub-teams in an interdisciplinary multi-asset team

30

years experience in multi-asset investing

6

asset classes : equities, bonds, currencies, alternative investments, commodities, derivatives

Benefiting from all market cycles

Our philosophy consists of investing in a combination of assets with a dynamic portfolio management approach. This aims to ensure the diversification of the portfolio and our ability to seize the opportunities offered depending on the market environment.

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Being disciplined

Our investment process is anchored in solid convictions born out of collective discussions. It is based first of all on Candriam's macroeconomic research, for an accurate assessment of the environment. The dual fundamental and quantitative analysis that follows evaluates the expected returns on each asset class, before a behavioural filter integrates the contextual elements that could affect the portfolios. The asset allocation is then optimised according to the return and risk objectives of the strategies. Ultimately, decisions are made collaboratively, at weekly and monthly committee meetings. This investment process, which is systematically applied, enables us to define the best potential portfolios according to our convictions, with a good level of diversification in line with the target risk levels.

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Rigorous adjustment of risk

Diversification – our ability to access multiple markets and independent sources of return – is our primary objective and driver for risk management. Management bias is an integral part of risk adjustment, so our second driver is portfolio optimisation. The portfolios are optimised by taking into account various risk indicators such as Conditional Value at Risk (CVaR)[1] to limit the maximum potential loss of the portfolio. A stop-loss[2] is set for each transaction. This is an additional way of constantly adjusting risk with rigour and discipline.

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Widening the range of opportunities

Our expertise in asset allocation, our ability to seek out and combine a large number of asset classes, our ESG expertise, our dialogue with experts who specialise in each asset class and geographical area... all of these offer our clients effective strategies that are capable of adapting strategically and tactically to very different market environments.

[1]A CVaR of 5% is the expected return on the portfolio in the 5% worst-case scenarios over a given time horizon.

[2] A stop-loss is the maximum loss accepted on a transaction in the event of an unfavourable trend in the trade and triggers an automatic sell order for the position when the threshold is reached.

FUNDS

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  • All our publications
  • Meet our experts
  • Candriam in the press

Main risks on Asset Allocation Strategies

  • Risk of loss of capital
  • Equity risk
  • Interest rate risk
  • Credit risk
  • High Yield risk
  • Currency risk
  • Derivative risk
  • Arbitrage risk
  • Emerging market risk

Latest analyses

  • Asset Allocation, Monthly Coffee Break

    Could fiscal aid mitigate the impact of the energy crisis on European equities?

    While inflation continues to surprise to the upside, growth dynamics have turned and continue to decelerate. Growth concerns are mainly affecting Europe, as energy prices remain an important inflation driver, while central banks are stepping up their tightening. The negative impact of the energy crisis could be mitigated, as countries are stepping up fiscal aid. Overall, we expect stronger downwards profit revisions in Europe than in the US, as the European equity market is more pro-cyclical, and we confirm our underweight stance on EMU equities. We also maintain a preference for US duration exposure over European, within an overall neutral portfolio duration.
  • Asset Allocation, Macro, Nadège Dufossé, Thibaud Marie-Regnault, Video

    Overloaded by the sheer number of forecasts at the moment?

    Despite this wealth of information – or perhaps because of too much information? – maybe you are still uncertain.  We can help you organize and develop your views, in a 20-minute video. Our economists and strategists will try to clarify the economic and financial risks.
  • Asset Allocation, Olivier Clapt, Research Paper

    Illiquid investments – But how much?

    As 2022 opened, we all thought of Covid, war, oil prices, transient inflation... What do you see on the horizon now? Wheat supply crisis? Quantitative tightening? Sustained inflation?
  • Asset Allocation, Monthly Coffee Break

    Caution, hot

    This year’s European summer heatwave and drought has the potential to worsen the current energy crisis, as river water levels have dropped significantly.
  • Asset Allocation, Nadège Dufossé, Outlook 2022

    Prepare for landing

    As we reach the halfway point in the year, global growth forecasts continue to be revised downwards and headwinds remain significant…
  • Asset Allocation, Monthly Coffee Break

    Prepare for landing

    The multiple shocks experienced so far in 2022 have led to a rare simultaneous decline in equity and bond values. As uncomfortably high inflation leads major central banks to tighten monetary policies, investors are preparing for the landing of the global economy.
  • Asset Allocation, Monthly Coffee Break

    Tightening into the slowdown

    The reasons for a prudent allocation have not changed in recent weeks: facing high inflation, central bank rhetoric and policy tools have triggered a tightening in financial conditions while the global economic slowdown is now well underway, as the war in Ukraine and Covid-related lockdowns in China weigh on confidence and activity.
  • Asset Allocation, Thibaut Dorlet

    Chinese Equities: At the Rock Bottom?

    As the COVID-19 pandemic weakened its mighty grip, China enjoyed a strong recovery, helped by developed economies’ consumption switch from services to manufacturing products, many of them coming from China.
  • Asset Allocation, Monthly Coffee Break

    Accelerating towards the cycle end

    Exiting the pandemic, entering the war and tightening monetary policies around the globe are acting together as a formidable business cycle accelerator.
  • Asset Allocation

    Economic and financial outlook

    As recently as the beginning of February, a total invasion still seemed unlikely. Since then, we have chosen to position for a potentially binary outcome, and have increased exposure to gold, the USD, the YEN, and the CHF, as well as to some commodities such as oil, while cutting our exposure to financials, reducing our equity exposure, and adding protection.

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