Skip to main content

Ethna-AKTIV | The name says it all

The multi-asset fund weathered the storm in a show of strength

The first three quarters of 2022 ended with a bitter realization for many investors who had blindly bet on prices to continue to rise in the rush for cheap money of recent years. They were faced with losses on an historic scale. In addition to geopolitical conflicts, central banks began withdrawing liquidity and this, along with higher interest rates, led to simultaneous stress in almost all asset classes. Such were the heavy losses that this time period is likely to go down in history among the ranks of worst ever.

But not everyone was so badly caught out. It was and still is possible despite the weakening market to stay in control and not be relegated to the role of mere bystander. Looking at the year to date, the Ethna-AKTIV’s management team has managed to do just that. In particular, the results in the second quarter of 2022 secured the fund an outperformance over its highly notable peer group. Central to this performance is the underlying approach and investment philosophy. The Ethna-AKTIV is an actively managed, flexible multi-asset fund, which is benchmark agnostic and prioritises the protection of investor capital.

Active, flexible and preserving capital – what does that mean in reality?

Actively managing portfolio allocation means that we always have the freedom to dynamically re-allocate the positions we entered into and to adjust to changing circumstances. Fixed allocations are a no-no. In other words, the basis for creating added value under the multi-asset approach is the mix of asset classes held in the portfolio. The mix provides an optimal risk/return ratio, and to put it together, the Ethna-AKTIV can use instruments with daily liquidity from among bonds, equities, commodities, cash and currencies. The matter of relative attractiveness of the individual asset classes at any given time is addressed both at strategic and tactical level. The strategic asset allocation is based on the portfolio managers’ macro-economic assessment, while the tactical allocation tends to account for short-term momentum and sentiment factors.

Flexibility is also central to what we do. The Ethna-AKTIV is not constrained by a benchmark. What’s important is absolute rather than relative performance. The same goes for our investment positions. This is another important differentiator. It is this flexibility that enables us to seize opportunities that arise and occasionally to take up unconventional positionings, and to go the distance. It doesn’t end there, though.

This, combined with the principle of capital preservation, makes for a overarching philosophy that is instrumental in our decision-making process. We are very aware of the fine line between capital growth and capital preservation. Therefore, the aim of our approach is to generate a attractive risk-adjusted return over a 3 to 5 year cycle. The year to date has made it abundantly clear how unpredictable the international financial markets can be and that huge drawdowns are possible. We have to avoid such extremes, which of course also have an emotional impact on investors and sometimes lead to irrational actions like selling at the worst possible time. Furthermore, the preservation of capital in times of crisis also means lower losses that would otherwise have to be recouped for capital to be increased long-term. This is why it is essential for us to find an attractive relationship between risk and return for every position we enter into.

Criteria for success in 2022

To date 2022 has been dominated by a combination of uncertainty and losses across the board. There is still relative uncertainty about where inflation is headed, the growth outlook and monetary/fiscal policy. What with this, the war in Ukraine, the COVID-19 situation in China and the resurgence of problems in Europe’s periphery, there are many stress factors for the capital markets. Despite that, the Ethna-AKTIV weathered the storm in a consistent show of relative strength.

Ethna-AKTIV versus its peers

How did we actually achieve this?

The answer lies in our investment philosophy. Guided by the principles of active management, benchmark-agnosticism and capital preservation, we have made substantial adjustments to the fund exposure in the year to date. The result at the end of October was a loss of 4,8%. Compare this with a traditional 60/40 portfolio, which is currently down by well into the double digits. This is also proof that static investment concepts can quickly reach their limits in a very challenging capital market environment.

Our team were quite quick to see which way the wind was blowing at the beginning of the year. We anticipated a global economy where growth rates, rather than increasing, were falling sharply. The central banks also instituted a change of policy. Not only did they end their large-scale securities purchases and, in fact, switched over to selling them, but they took up the fight against persistently high inflation with great determination by hiking interest rates rises, and this became a stress factor. A highly restrictive monetary policy in an environment of waning growth stood in stark contrast to the valuations that were still at record highs at the beginning of the year. Instead of reacting to market movements, we tried to act in anticipation of interest rates that were obviously going to rise and share prices that were going to fall. This enabled us to remain agile in the event that this market scenario occurred, and to take any opportunities that arose.

Examples for clarification

The Ethna-AKTIV’s equity exposure, which was still high at the beginning of the year, was reduced even before the war broke out and later reduced to zero. When the negative mood in the equity markets coincided with strong overselling in May and October, respectively, we were proactive in taking these tactical opportunities to benefit from the very likely counter movements. Against the background of strategic caution, however, these positions were closed at a profit after a relatively short period. The US dollar allocation was managed with similar dynamism. Basically, we benefited from a strategic US dollar quota throughout the year. Nevertheless, we were able to tactically exploit twice an exaggeration in our favour be reducing it in the run-up to the ECB meetings.

It could be argued that there was a lot of luck involved; after all, one swallow does not make a summer. While the latter is true, the underlying philosophy and the process arising out of it ensures that such results are reproducible. Looking ahead, the decisive point will be to participate to a reasonable extent in the next bull market to generate an attractive risk-adjusted return for the cycle as a whole. We are very well positioned to achieve this. By avoiding heavy losses in recent months we have at least cleared the first hurdle towards reaching this goal.

The current 4-star rating from Morningstar also shows that we are second to none when it comes to generating returns. The Ethna-AKTIV represents a suitable basic instrument both for existing and potential investors, which never loses sight of its target even in stormy weather.

Applies, among others, to the share class Ethna-AKTIV (A).| As of: 30.11.2022

This is a marketing communication. It is for information purposes only and provides the addressee with guidance on our products, concepts and ideas. This does not form the basis for any purchase, sale, hedging, transfer or mortgaging of assets. None of the information contained herein constitutes an offer to buy or sell any financial instrument nor is it based on a consideration of the personal circumstances of the addressee. It is also not the result of an objective or independent analysis. ETHENEA makes no express or implied warranty or representation as to the accuracy, completeness, suitability, or marketability of any information provided to the addressee in webinars, podcasts or newsletters. The addressee acknowledges that our products and concepts may be intended for different categories of investors. The criteria are based exclusively on the currently valid sales prospectus. This marketing communication is not intended for a specific group of addressees. Each addressee must therefore inform themselves individually and under their own responsibility about the relevant provisions of the currently valid sales documents, on the basis of which the purchase of shares is exclusively based. Neither the content provided nor our marketing communications constitute binding promises or guarantees of future results. No advisory relationship is established either by reading or listening to the content. All contents are for information purposes only and cannot replace professional and individual investment advice. The addressee has requested the newsletter, has registered for a webinar or podcast, or uses other digital marketing media on their own initiative and at their own risk. The addressee and participant accept that digital marketing formats are technically produced and made available to the participant by an external information provider that has no relationship with ETHENEA. Access to and participation in digital marketing formats takes place via internet-based infrastructures. ETHENEA accepts no liability for any interruptions, cancellations, disruptions, suspensions, non-fulfilment, or delays related to the provision of the digital marketing formats. The participant acknowledges and accepts that when participating in digital marketing formats, personal data can be viewed, recorded, and transmitted by the information provider. ETHENEA is not liable for any breaches of data protection obligations by the information provider. Digital marketing formats may only be accessed and visited in countries in which their distribution and access is permitted by law. For detailed information on the opportunities and risks associated with our products, please refer to the current sales prospectus. The statutory sales documents (sales prospectus, key information documents (PRIIPs-KIDs), semi-annual and annual reports), which provide detailed information on the purchase of units and the associated risks, form the sole authoritative and binding basis for the purchase of units. The aforementioned sales documents in German (as well as in unofficial translations in other languages) can be found at and are available free of charge from the investment company ETHENEA Independent Investors S.A. and the custodian bank, as well as from the respective national paying or information agents and from the representative in Switzerland. The paying or information agents for the funds Ethna-AKTIV, Ethna-DEFENSIV and Ethna-DYNAMISCH are the following: Austria, Belgium, Germany, Liechtenstein, Luxembourg: DZ PRIVATBANK S.A., 4, rue Thomas Edison, L-1445 Strassen, Luxembourg; France: CACEIS Bank France, 1-3 place Valhubert, F-75013 Paris; Italy: State Street Bank International – Succursale Italia, Via Ferrante Aporti, 10, IT-20125 Milano; Société Génerale Securities Services, Via Benigno Crespi, 19/A - MAC 2, IT-20123 Milano; Banca Sella Holding S.p.A., Piazza Gaudenzio Sella 1, IT-13900 Biella; Allfunds Bank S.A.U – Succursale di Milano, Via Bocchetto 6, IT-20123 Milano; Spain: ALLFUNDS BANK, S.A., C/ Estafeta, 6 (la Moraleja), Edificio 3 – Complejo Plaza de la Fuente, ES-28109 Alcobendas (Madrid); Switzerland: Representative: IPConcept (Schweiz) AG, Münsterhof 12, Postfach, CH-8022 Zürich; Paying Agent: DZ PRIVATBANK (Schweiz) AG, Münsterhof 12, CH-8022 Zürich. The paying or information agents for HESPER FUND, SICAV - Global Solutions are the following: Austria, France, Germany, Luxembourg: DZ PRIVATBANK S.A., 4, rue Thomas Edison, L-1445 Strassen, Luxembourg; Italy: Allfunds Bank S.A.U – Succursale di Milano, Via Bocchetto 6, IT-20123 Milano; Switzerland: Representative: IPConcept (Schweiz) AG, Münsterhof 12, Postfach, CH-8022 Zürich; Paying Agent: DZ PRIVATBANK (Schweiz) AG, Münsterhof 12, CH-8022 Zürich. The investment company may terminate existing distribution agreements with third parties or withdraw distribution licences for strategic or statutory reasons, subject to compliance with any deadlines. Investors can obtain information about their rights from the website and from the sales prospectus. The information is available in both German and English, as well as in other languages in individual cases. Explicit reference is made to the detailed risk descriptions in the sales prospectus. This publication is subject to copyright, trademark and intellectual property rights. Any reproduction, distribution, provision for downloading or online accessibility, inclusion in other websites, or publication in whole or in part, in modified or unmodified form, is only permitted with the prior written consent of ETHENEA. Copyright © 2023 ETHENEA Independent Investors S.A. All rights reserved. Munsbach, 14/07/2022