Since 2008, government and central bank subsidies have continued to benefit the most liquid assets (notably OAT, bonds and equities). However, since 2020, we have observed a significant decline in the yields of these liquid classes, coupled with an increased correlation among these assets, leading to a substantial diversification challenge for traditional diversified asset managers.

Since 2006, we have held the conviction that performance must be achieved within a framework of controlled and minimal risk, prioritizing diversification into uncorrelated assets, irrespective of liquidity. This belief has lead us to develop a unique core-satellite model, allowing us to manage your assets with risk parity and without financial leverage.

In our portfolio construction process, we conduct a comprehensive analysis of various economic parameters, including Growth, Inflation, Risk Sentiment, Microeconomic Factors, and Investment Style (e.g., Growth vs. Value or sector analysis). These factors significantly influence asset price movements and valuations in the financial markets.

The Growth/Inflation matrix was first used by investors like Harry Brown and Jay Schabacker in the 1970s. Having inspired by the matrix, we integrated it as a foundational element of our model. Additionally, we evaluate the potential returns of the diverse asset classes based on these macroeconomic scenarios, that are considered while building our model portfolios. Our asset classes are influenced by the Yale model, which broadens the investment universe by incorporating alternative underlying. The resulting model portfolios are customized to meet the specific requirements of each client.

These factors and the resulting analysis hence enable us to construct portfolios that are responsive to evolving market conditions, providing protection against significant downturns (with stable volatility) while delivering consistent and robust performance over the long.