INVESTMENT PHILOSOPHY WHY SHOULD YOU INVEST? PORTFOLIOS STRATEGIC ALLIANCES FAQ
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Diversification across regions and asset classes is key since there is no asset class that consistently outperforms over time.

Why Asset Allocation?

Throughout history, academia and industry both confirm that asset class selection is the outmost contributor to overall portfolio performance. The following graph highlights Calendar year returns by asset class. It clearly illustrates how the top performers from 1997 until 2017 varied throughout the decades.

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
33%
U.S. Stocks
29%
U.S. Stocks
66%
Emerging Market Bonds
50%
Commodities
4%
U.S. 10Y Treasury Bonds
32%
Commodities
56%
Emerging Market Stocks
26%
Emerging Market Stocks
35%
Emerging Market Stocks
33%
Emerging Market Stocks
40%
Emerging Market Stocks
20%
U.S. 10Y Treasury Bonds
79%
Emerging Market Stocks
19%
Emerging Market Stocks
17%
U.S. 10Y Treasury Bonds
19%
Emerging Market Stocks
32%
U.S. Stocks
14%
U.S. Stocks
1%
U.S. Stocks
12%
U.S. Stocks
38%
Emerging Market Stocks
12%
Emerging Market Bonds
20%
Developed Stocks ex-U.S.
41%
Commodities
15%
U.S. 10Y Treasury Bonds
1%
Emerging Market Bonds
22%
Developed Gov't Bonds ex-U.S.
39%
Developed Stocks ex-U.S.
21%
Developed Stocks ex-U.S.
26%
Commodities
27%
Developed Stocks ex-U.S.
33%
Commodities
10%
Developed Gov't Bonds ex-U.S.
32%
Developed Stocks ex-U.S.
15%
Emerging Market Stocks
8%
Emerging Market Bonds
19%
Emerging Market Bonds
23%
Developed Stocks ex-U.S.
11%
U.S. 10Y Treasury Bonds
1%
Emerging Market Bonds
12%
U.S. Stocks
26%
Developed Stocks ex-U.S.
11%
U.S. 10Y Treasury Bonds
18%
Developed Gov't Bonds ex-U.S.
27%
Developed Stocks ex-U.S.
14%
Emerging Market Bonds
-2%
Emerging Market Stocks
15%
U.S. 10Y Treasury Bonds
29%
U.S. Stocks
17%
Commodities
14%
Developed Stocks ex-U.S.
16%
U.S. Stocks
12%
Developed Stocks ex-U.S.
-11%
Emerging Market Bonds
28%
Emerging Market Bonds
12%
Emerging Market Bonds
5%
Developed Gov't Bonds ex-U.S.
18%
Developed Stocks ex-U.S.
-1%
Commodities
6%
Emerging Market Bonds
1%
U.S. 10Y Treasury Bonds
11%
Commodities
22%
U.S. Stocks
2%
Developed Stocks ex-U.S.
13%
U.S. 10Y Treasury Bonds
24%
Emerging Market Bonds
-3%
Developed Gov't Bonds ex-U.S.
-4%
Developed Gov't Bonds ex-U.S.
13%
Emerging Market Bonds
26%
Emerging Market Bonds
12%
Developed Gov't Bonds ex-U.S.
11%
Emerging Market Bonds
10%
Emerging Market Bonds
11%
Developed Gov't Bonds ex-U.S.
-37%
U.S. Stocks
26%
U.S. Stocks
9%
Commodities
2%
U.S. Stocks
16%
U.S. Stocks
-2%
Emerging Market Stocks
-2%
Emerging Market Stocks
0%
Developed Stocks ex-U.S.
10%
Emerging Market Bonds
10%
Developed Gov't Bonds ex-U.S.
-4%
Developed Gov't Bonds ex-U.S.
-12%
Emerging Market Bonds
21%
U.S. Stocks
-9%
U.S. Stocks
-12%
U.S. Stocks
-6%
Emerging Market Stocks
21%
Commodities
12%
Emerging Market Bonds
5%
U.S. Stocks
7%
Developed Gov't Bonds ex-U.S.
10%
U.S. 10Y Treasury Bonds
-43%
Developed Stocks ex-U.S.
13%
Commodities
8%
Developed Stocks ex-U.S.
-1%
Commodities
4%
U.S. 10Y Treasury Bonds
-5%
Developed Gov't Bonds ex-U.S.
-3%
Developed Gov't Bonds ex-U.S.
-6%
Developed Gov't Bonds ex-U.S.
2%
Developed Gov't Bonds ex-U.S.
9%
Emerging Market Bonds
-12%
Emerging Market Stocks
-25%
Emerging Market Stocks
-5%
Developed Gov't Bonds ex-U.S.
-14%
Developed Stocks ex-U.S.
-21%
Developed Stocks ex-U.S.
-16%
Developed Stocks ex-U.S.
19%
Developed Gov't Bonds ex-U.S.
11%
U.S. Stocks
2%
U.S. 10Y Treasury Bonds
1%
U.S. 10Y Treasury Bonds
6%
Emerging Market Bonds
-46%
Commodities
4%
Developed Gov't Bonds ex-U.S.
8%
U.S. 10Y Treasury Bonds
-12%
Developed Stocks ex-U.S.
2%
Developed Gov't Bonds ex-U.S.
-7%
Emerging Market Bonds
-4%
Developed Stocks ex-U.S.
-15%
Emerging Market Stocks
2%
Developed Stocks ex-U.S.
6%
Commodities
-14%
Commodities
-36%
Commodities
-8%
U.S. 10Y Treasury Bonds
-31%
Emerging Market Stocks
-32%
Commodities
-22%
U.S. Stocks
1%
U.S. 10Y Treasury Bonds
5%
U.S. 10Y Treasury Bonds
-9%
Developed Gov't Bonds ex-U.S.
-15%
Commodities
5%
U.S. Stocks
-53%
Emerging Market Stocks
-10%
U.S. 10Y Treasury Bonds
5%
Developed Gov't Bonds ex-U.S.
-18%
Emerging Market Stocks
0%
Commodities
-8%
U.S. 10Y Treasury Bonds
-33%
Commodities
-33%
Commodities
0%
U.S. 10Y Treasury Bonds
2%
U.S. 10Y Treasury Bonds

Scroll to see previous and nexts years.

Key determinants of portfolio performance

In the previous years, sophisticated investing solutions were limited to the institutional level; now these are broadly available.

Globally, investors are moving away from products that offer limited investment opportunities and towards a model, or a “whole portfolio” approach.

Today, any person that wishes to invest has access to a diversified Model Portfolio Solution through our digital platform.

Our Model Portfolios

Our model portfolios are designed and managed in partnership with BlackRock’s Model Portfolio Solutions. The purpose of these model portfolios is to deliver efficiency, transparency, and cost effectiveness. The selected UCITS ETFs that are part of the Model Portfolios are designed to meet specific goals such as global diversification, tactical exposures, and tax efficiency. The implementation procedure guides each individual investor on how to invest in the most appropriate vehicle for their profile. The vehicle selection process is primarily driven by exposure, efficiency, and cost; leveraging more than 300 UCITS ETFs.

BlackRock's portfolio construction process

Variables

The variables in the systematic optimization process are Return-Risk-Efficiency.

Process

The Model Portfolio Solutions (MPS) Construction is a simple four-step process that leverages the entirety of BlackRock’s technology and risk platform.

1. SYSTEMATIC – by translating investor outcomes into well-diversified allocations through a proprietary optimization process.
2. DISCRETION – when evaluating risks and opportunities associated with attractively priced asset classes.
3. CONSTRUCTION – through identifying cost-effective and efficient holdings and selecting them for constructing the portfolio.
4. MONITOR – a team of professionals are constantly monitoring the portfolio to quickly adapt to changing market conditions.

How We Invest?

Methodology

Risk Capacity

When you open your account, we ask you a few questions so we can determine your attitude towards risk and risk tolerance, investment knowledge and objectives, your net worth, time horizon and liquidity needs.

Investment Vehicles

In order to create globally diversified portfolios, the Model Portfolios use across-the-board uncorrelated asset-classes. In order to accomplish this, it only uses UCITS ETFs. Regularly, the universe of UCITS ETFs in the Model Portfolios is reviewed to identify the most appropriate ones to represent each of the asset classes. The Model Portfolios include the UCITS and ETFs that offer market liquidity, minimize tracking error and are tax efficient.

Asset Allocation

Based on the systematic investment process and after an in-depth analysis on each asset class, together with BlackRock we determine the optimal mix for your portfolio to generate a return at the lowest risk. The objective is to create an asset allocation that produces the maximum possible return while respecting your particular risk tolerance. Translating investor outcomes and restrictions into globally well-diversified allocations: Return – Risk – Cost.

Monitoring and Rebalancing

To keep portfolios in track with long-term goals, the Model Portfolios are monitored and regularly rebalanced back to its target mix in an effort to optimize returns for their intended level of risk.

Why Only UCITS ETF's?

A UCITS ETFs is a security that usually tracks a basket of stocks, bonds, or assets like an index fund, but trades like a stock on a stock exchange. They closely track their benchmarks, such as Dow Jones Industrial Average or the S&P500. They provide great diversification, offer ample liquidity, and are tax efficient for investors who do not reside in the U.S.

Definite Mandates

We only use UCITS ETFs that have a definite mandate to passively track benchmark indexes. This restricts the fund manager to simply replicate the performance of the benchmark they follow and ensures the same level of investment diversification as the benchmark itself.