multi-asset
All Roads: 5 years of growth
Need to know
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Stable returns using liquid assets
How could a multi-asset portfolio weather bumps along the road while simultaneously capturing compelling returns? The All Roads suite of multi-asset funds was designed to do exactly that: aim to provide stable returns across market cycles using liquid investments.
Launched in February 2017, the LO Funds - All Roads Growth fund put the emphasis on a more ambitious approach to risk and return, aiming to generate higher performance (cash+7% target) commensurate with a greater risk profile1 than its sister strategies, All Roads Conservative and the original, balanced profile.
With EUR 3.1bn assets under management today across the All Roads fund suite, the growth strategy has produced what it set out to do five years ago, returning 6.8% annualised (corresponding to cash+7.1%) and a cumulative 38% since inception to end-January 20221. The drawdown for All Roads Growth of 13.4% was lower than our budget of 17.5%, while our Sharpe ratio of 0.9 was on target for the 0.7-1.0 we envisaged.
Diversification and liquidity
The fund’s return compares favourably to other growth-oriented multi-asset funds over the same period, but achieved its results with a fraction of the risk.
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All-Roads Growth |
Bloomberg EU 60/40 index |
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Annualised return |
6.8% |
5.7% |
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Volatility |
8.2% |
10.6% |
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Maximum drawdown |
13.4% |
25.7% |
Source: LOIM, Bloomberg. Refers to performance from inception to 31 Jan 2022, net of fees. For illustrative purposes only. Past performance is not a guarantee of future returns. The ticker for the Bloomberg index is BMAEUR64.
How did we accomplish this? By sticking to our principles of diversifying investments across asset classes and using an agile and adaptive approach.
To us, a growth multi-asset fund should not blindly invest 60% (or more) in equities as many other funds do. Instead, we put the emphasis on diversifying sources of return as well as all aspects of the investment process. Liquid instruments are prioritised because we rebalance the portfolio actively and methodically to consider changing market hazards and meet pre-defined risk limits, rather than targeting static weights.
A systematic approach
At its core, our approach is deliberately systematic. We believe in removing the emotional element from investing by relying on a disciplined and rules-based investment style that separates emotions from investment decisions. This helps us follow a game plan based on risk limits even if events turn out differently than anticipated.
Once the portfolio is constructed, the allocation to each asset class is actively managed, depending on how risks evolve. As such, we react constantly to short-term, tactical signals with marginal and progressive calibration. This lends flexibility to the process and ensures the portfolio is adapted to the current environment.
Weathering disruptions and uncertainty
What bumps have been encountered along the way? Over the past half-decade, All Roads Growth has focused on obtaining higher risk-adjusted returns in different, and sometimes difficult, market contexts. For instance since launch, the fund has successfully weathered major disruptions such as the equity downturn in 2018 and the turmoil accompanying the Covid pandemic in 2020.
Throughout such periods of unforeseen and pronounced drawdown, All Roads Growth has managed to deliver on its objectives by holding a diversified exposure at all times, avoiding losses through actively managing drawdowns and benefiting from positive returns from insurance strategies.
- Diversification: Our foundational principle is to be invested across asset classes. During the Covid-19 crisis, for instance, this meant that our exposure to sovereign bonds helped add to performance as these bonds rallied.
- Drawdown management: This technique means that during periods of extreme volatility, we reduce exposure and resort to cash investments in order to avoid losses. Staying in cash helped cushion All Roads Growth from downside3.
- Insurance strategies: We invest in a basket of long- volatility strategies on rates and equities. This paid off nicely in March 2020 and meaningfully shielded the portfolio.
Going forward, the macroeconomic environment presents considerable uncertainty. Amid mounting inflation, central banks are removing monetary stimulus yet the outlook for growth and a potential ‘policy mistake’ remain concerning. An attentive and agile approach is well-suited to helping investors tackle the risks arising from such an environment while maintaining a stable return target.
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Tailored to investors who prize steady returns and a higher appetite for risk, All Roads Growth has spent five years delivering on its objectives. We believe the present investment context bodes well for that to continue. |
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To discover more about the All Roads strategy, please watch our video:
sources.
1. Target performance/risk represents a portfolio construction goal. It does not represent past performance/risk and may not be representative of actual future performance/risk.
2. Refers to fund performance as at 31 January 2022, net of fees for share class EUR NA. Past performance is not a guarantee of future returns.
important information.
For professional investors only
The Fund is authorised and regulated by the Luxembourg Supervisory Authority of the Financial Sector (CSSF) as a UCITS within the meaning of EU Directive 2009/65/EC, as amended. The management company of the Fund is Lombard Odier Funds (Europe) S.A. (hereinafter the “Management Company”), a Luxembourg based public limited company (Société Anonyme SA), having its registered office at 291, route d’Arlon, L-1150 Luxembourg, authorized and regulated by the CSSF as a Management Company within the meaning of EU Directive 2009/65/EC, as amended. The Fund is only registered for public offering in certain jurisdictions. The management company of the fund may decide to terminate the arrangements made for the marketing of the Fund. The articles of association, the prospectus, the Key Investor Information Document, and the subscription form are the only official offering documents of the Fund’s shares (the “Offering Documents”). They are available on http//www.loim.com or can be requested free of charge at the registered office of the Fund or of the Management Company, from the distributors of the Fund or from the local representatives as mentioned below.
Austria. Supervisory Authority: Finanzmarktaufsicht (FMA), Representative: Erste Bank der österreichischen Sparkassen AG, Am Belvedere 1, 1100 Vienna - Belgium. Financial services Provider: CACEIS Belgium S.A., Avenue du Port 86C, b320, 1000 Brussels - France. Supervisory Authority: Autorité des marchés financiers (AMF), Representative: CACEIS Bank, place Valhubert 1-3, F-75013 Paris - Germany. Supervisory Authority: Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin), Representative: DekaBank Deutsche Girozentrale, Mainzer Landstraße 16, D-60325 Frankfurt am Main - Ireland. Supervisory Authority: Central Bank of Ireland (CBI), Facilities Agent: CACEIS Ireland, One Custom House Plaza, International Financial Services Centre, Dublin 1, Ireland – Italy. Supervisory Authority: Banca d’Italia (BOI) / ConSob, Paying Agents: Société Générale Securities Services S.p.A., Via Benigno Crespi, 19/A - MAC 2, 20159 Milano, State Street Bank International GmbH - Succursale Italia, Via Ferrante Aporti, 10, 20125 Milano, Banca Sella Holding S.p.A., Piazza Gaudenzio Sella, 1, 13900 Biella, Allfunds Bank, S.A.U., Milan Branch,Via Bocchetto 6, 20123 Milano, CACEIS Bank S.A., Italy Branch, Piazza Cavour 2, 20121 – Milano - Liechtenstein. Supervisory Authority: Finanzmarktaufsicht Liechtenstein (“FMA”), Representative, LGT Bank AG Herrengasse 12, 9490 Vaduz - Netherlands. Supervisory Authority: Autoriteit Financiële Markten (AFM). Representative: Lombard Odier Funds (Europe) S.A. – Dutch Branch, Parklaan 26, 3016BC Rotterdam - Spain. Supervisory Authority: Comisión Nacional del Mercado de Valores (CNMV), Representative: Allfunds Bank, S.A.U. C/ de los Padres Dominicos, 7, 28050, Madrid – Sweden. Supervisory Authoriy: Finans Inspektionen (FI). Representative: SKANDINAVISKA ENSKILDA BANKEN AB (publ), Kungsträdgårdsgatan, SE-106 40 Stockholm – Switzerland. Supervisory Authority: FINMA (Autorité fédérale de surveillance des marchés financiers), Representative: Lombard Odier Asset Management (Switzerland) SA, 6 av. des Morgines, 1213 Petit-Lancy; Paying agent: Bank Lombard Odier & Co Ltd, 11 rue de la Corraterie, CH-1204 Geneva. UK. Supervisory Authority: Financial Conduct Authority (FCA), Representative: Lombard Odier Asset Management (Europe) Limited, Queensberry House, 3 Old Burlington Street, London W1S3AB,
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An investment in the Fund is not suitable for all investors. There can be no assurance that the Fund's investment objective will be achieved or that there will be a return on capital. Past or estimated performance is not necessarily indicative of future results and no assurance can be made that profits will be achieved or that substantial losses will not be incurred. Where the fund is denominated in a currency other than an investor's base currency, changes in the rate of exchange may have an adverse effect on price and income. All performance figures reflect the reinvestment of interest and dividends and do not take account the commissions and costs incurred on the issue and redemption of shares/units; performance figures are estimated and unaudited. Net performance shows the performance net of fees and expenses for the relevant fund/share class over the reference period. This document does not contain personalized recommendations or advice and is not intended to substitute any professional advice on investment in financial products. Before making an investment in the Fund, an investor should read the entire Offering Documents, and in particular the risk factors pertaining to an investment in the Fund, consider carefully the suitability of such investment to his/her particular circumstances and, where necessary, obtain independent professional advice in respect of risks, as well as any legal, regulatory, credit, tax, and accounting consequences. This document is the property of LOIM and is addressed to its recipient exclusively for their personal use. It may not be reproduced (in whole or in part), transmitted, modified, or used for any other purpose without the prior written permission of LOIM. It is not intended for distribution, publication, or use in any jurisdiction where such distribution, publication, or use would be unlawful. This document contains the opinions of LOIM, as at the date of issue. The information and analysis contained herein are based on sources believed to be reliable. However, LOIM does not guarantee the timeliness, accuracy, or completeness of the information contained in this document, nor does it accept any liability for any loss or damage resulting from its use. All information and opinions as well as the prices indicated may change without notice. Neither this document nor any copy thereof may be sent, taken into, or distributed in the United States of America, any of its territories or possessions or areas subject to its jurisdiction, or to or for the benefit of a United States Person. For this purpose, the term "United States Person" shall mean any citizen, national or resident of the United States of America, partnership organized or existing in any state, territory or possession of the United States of America, a corporation organized under the laws of the United States or of any state, territory or possession thereof, or any estate or trust that is subject to United States Federal income tax regardless of the source of its income.
Source of the figures: Unless otherwise stated, figures are prepared by LOIM.
Important information on performance
Past performance is not a guarantee of future results. Where the fund is denominated in a currency other than an investor's base currency, changes in the rate of exchange may have an adverse effect on price and income. All performance figures reflect the reinvestment of interest and dividends and do not take account the commissions and costs incurred on the issue and redemption of shares/units; performance figures are estimated and unaudited. Net performance shows the performance net of fees and expenses for the relevant fund/share class over the reference period. Source of the figures: Unless otherwise stated, figures are prepared by LOIM.
Important information on benchmarks
Any benchmarks/indices cited herein are provided for information purposes only. No benchmark/index is directly comparable to the investment objectives, strategy or universe of a fund. The performance of a benchmark shall not be indicative of past or future performance of any fund. It should not be assumed that the relevant fund will invest in any specific securities that comprise any index, nor should it be understood to mean that there is a correlation between such fund’s returns and any index returns.
The strategy may include the use of derivatives. Derivatives often involve a high degree of financial risk because a relatively small movement in the price of the underlying security or benchmark may result in a disproportionately large movement in the price of the derivative and are not suitable for all investors. No representation regarding the suitability of these instruments and strategies for a particular investor is made.
If the funds are denominated in a currency other than that in which the majority of the investor’s assets are held, the investor should be aware that changes in rates of exchange may affect the value of the funds’ underlying assets. The portfolio risk management process includes an effort to monitor and manage risk, but does not imply low risk.
Emerging markets securities may be less liquid and more volatile and are subject to a number of additional risks including, but not limited to, currency fluctuations and political instability.
Models may be misspecified, badly implemented or may become inoperative when significant changes take place in the financial markets or in the organization. Such a model could unduly influence portfolio management and expose to losses.
Views and opinions expressed are for informational purposes only and do not constitute a recommendation by LOIM to buy, sell or hold any security. Views and opinions are current as of the date of this presentation and may be subject to change. They should not be construed as investment advice.
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