Mixed mandate

Efficient implementation of mixed mandates

Implementing an investment strategy with market cap-weighted index funds is not efficient. Research in financial markets confirms that these indices do not exhibit an optimal return to risk ratio (Sharpe ratio). Therefore, classical indexing generates opportunity costs.

OLZ Smart Investing means efficient implementation of an investment strategy using OLZ minimum variance funds. The implementation is systematic (rule-based) and cost-conscious. The result is a significantly better return to risk ratio (Sharpe ratio).

Basic principles

Effective diversification of the global portfolio
OLZ targets effective risk diversification. OLZ considers the risk factors behind asset classes (equity risks, interest rate risks, credit risks, currency risks, liquidity risks, etc.). Risks which do not contribute to diversification, or are not compensated with a premium, are avoided.

Optimised diversification within asset classes
OLZ minimum variance funds are optimally designed portfolios based on estimated risk parameters (volatilities, correlations). Thus, fluctuations in value (volatility) and loss due to market corrections are significantly reduced.

Above-average return thanks to low volatility premium
OLZ’s minimum variance portfolio optimally captures the low volatility premium of the individual asset class.

Efficient utilisation of the risk budget possible
OLZ Smart Investing enables better utilisation of the risk budget. With the same risk budget, there are more degrees of freedom in designing asset allocation. For example, a higher proportion can be invested in minimum variance optimised equity portfolios. Thus, the expected return rises with the same risk relative to the Pictet BVG Index.

OLZ Smart Investing is available as a mixed mandate for efficient implementation of investment strategies. We are happy to calculate potential efficiency increase based on your individual data.