All data as of: 10/7/2022
Ethna-AKTIV | Portfolio Manager Update – August 2022
How did the portfolio management team manage the month of August?
In his latest video, Michael Blümke gives an update on how the fund is positioned in the current market environment.
The Ethna-AKTIV, our flagship fund, is an actively managed, flexible, multi-asset fund that does not follow any benchmarks. With a focus on asset allocation - it has the greatest degree of freedom in this respect among the Ethna Funds - the Ethna-AKTIV spreads its investment between bonds, equities, currencies and commodities. The fund’s core investment is a high-quality fixed income portfolio of corporate and government bonds, in which the duration and credit risk are managed flexibly and independently from the individual bonds.
In addition, the Ethna-AKTIV can have an equity allocation of up to 49%, through single stocks, liquid futures and listed options. To diversify its portfolio further, the fund can also include up to 20% in gold and/or other commodities.
The top-down approach in the Ethna-AKTIV
The experienced Portfolio Management Team uses a top-down approach with rigorous macro-economic and financial market analysis to determine in which asset classes, regions and sectors to invest. This, together with the use of liquid index derivatives (also known as a dynamic overlay strategy), enables the Portfolio Managers to optimise the fund’s risk/return profile. Within the aforementioned top-down framework, the selection of the bonds is carried out via a rigorous bottom up fundamental analysis.
The Ethna-AKTIV as a risk-controlled base investment
Following a flexible, multi-asset allocation approach, the Ethna-AKTIV’s aims are capital preservation and achieving attractive positive returns over a mid-term (3 – 5 years) investment horizon. The fund is therefore suitable as a base investment for investors who want risk-controlled access to macroeconomic developments on the global fixed income, equity, currency, and commodity markets.
Ethna-AKTIV | Our multi-asset flagship fund with a balanced portfolio
Flexibility and active management have been hallmarks of the Ethna-AKTIV since its launch in 2002. Today, 20 years later, the fund is still popular among investors for its balanced risk profile. Take a look at our video to discover which criteria form the basis of the fund's success.
Active. Macroeconomic Focus
Prices up, prices down - the global markets can be quite turbulent. This is precisely where active portfolio and risk management pays off. Capital preservation and the achievement of stable long-term returns are key components of our investment philosophy. All potential risks and prevailing macroeconomic conditions are considered in every investment decision.
Flexible. More freedom offers more opportunity
The Ethna-AKTIV does not measure itself against a benchmark or even another fund. This gives the fund management maximum freedom to successfully implement the asset allocation according to its evaluation and opinion. This flexibility pays off especially in the recent bear market.
Capital preserving. Profiting from opportunities in individual asset classes
Our goal is not to achieve the highest possible return, but to achieve a positive return over the long term while limiting losses in weak market phases. The investment approach of the Ethna-AKTIV aims for attractive risk-adjusted returns, because this is the prerequisite for long-term success.
The Ethna-AKTIV, a pioneer among multi-asset funds with a positive 20-year track record
Especially in unclear stock market times, it is difficult to find the right investment strategy. A mixed fund such as the Ethna-AKTIV is characterized above all by its ability to adapt quickly to new situations. Over the past 20 years, the Ethna-AKTIV, as a multi-asset fund, has been able to master a variety of crisis situations, such as the first half of 2022, thanks to the right mix of asset classes. The fund proved that it is suitable as a basic investment for investors who want a risk-controlled access to the capital markets.
An experienced team consisting of the founders Luca Pesarini, Arnoldo Valsangiacomo and the investment expert Michael Blümke
"We launched Ethna-AKTIV with the aim of providing investors a controlled access to the capital markets. Through its high flexibility and fine-tuned risk management, we aim to generate positive returns for our investors, while respecting their respective risk comfort zones. That is our ambition."
Luca Pesarini, one of the founders of the Ethna Funds
Luca Pesarini and Arnoldo Valsangiacomo pursued a revolutionary idea 20 years ago with their multi-asset approach, which is why the Ethna-AKTIV is considered a pioneer in this segment. To this day, the founders stand behind their fund and, together with Michael Blümke, they follow the developments of the capital markets on a daily basis for the benefit of our investors.
ESG – taking environmental, social and governance criteria into account
Our aim is to offer clients responsible investment solutions with a competitive and sustainable return, as reflected in our investment guidelines and processes. The Ethna-AKTIV pursues an ESG strategy that complies with Article 8 of the EU’s Sustainable Finance Disclosure Regulation (2019/2088). In its bond and equity investments, the fund therefore gives preference to companies that have low exposure in terms of significant ESG risks, as well as companies that actively manage and thus reduce the ESG risks inevitably associated with their business activities. In addition, the sustainability approach taken by the Ethna-AKTIV is underscored by comprehensive exclusions:
- Investments in companies with a core activity in armaments, tobacco, pornography, speculation in basic foodstuffs and/or the mining/distribution of coal are prohibited.
- Furthermore, we do not invest in companies that have been found to be in serious breach of the principles of the UN Global Compact and have no convincing plan in place to remedy the situation.
- In the case of sovereign issuers, we exclude investments in countries that have been designated as “Not Free” in the annual analysis carried out by Freedom House.
What is ESG?
ESG is the abbreviated version of ‘Environmental, Social, and Governance’, criteria that many investors use alongside financial factors in their investment decisions.
ESG in our investment process
1. Broad exclusion of certain sectors that contradict the ESG principles
2. Assessment of the overall ESG rating of the individual companies based on the data from sustainalytics
3. Individual analysis of the particular ESG parameters of a company
In November 2017, we became a signatory to the Principles for Responsible Investment. These are six principles developed by investors and supported by the United Nations.
Opportunities & Risks
All financial investments are associated with opportunities and risks. Below you will find a compact overview of the opportunities and risks of the Ethna-AKTIV:
- A professional Portfolio Management team with many years’ experience.
- Reduction in value fluctuations due to combination of multiple asset classes and spread of invested capital across a variety of individual securities (diversification).
- Active risk management and hedging transactions (emphasis on capital preservation).
- Active portfolio management with the aim of delivering positive returns, even in weak market phases.
- Stability and continuity through a focus on fixed income securities.
- Participation in positive performance on equity and bond markets.
- Market, sector, and company-related price losses in the fund’s equity and bond investments; also as a result of a general rise in yields and/or increase in yield premiums for specific bond issuers.
- General, geographical and geopolitical country risks: these include the risk that an issuer of a bond, despite being solvent, cannot fulfil its obligations due to an inability or unwillingness on the part of a particular country to transfer funds to another country.
- Issuer, counterparty credit and default risk due to investing in bonds, equities and hedging trades: this includes the risk of insolvency due to issuer or counterparty debt overload or illiquidity. A total loss of the affected investment instrument is possible.
- Exchange rate risks through investing in foreign currencies or in equities and bonds denominated in a foreign currency.
- The investor suffers a loss if they sell the fund units at less than the acquisition price.
For detailed information on the opportunities and risks of investing in the Fund, please refer to the sales prospectus.
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