The Fundo capital gain
Fundo's engineers have developed a methodology and a range of products (mandates, funds, certificates and indices) focused on risk control. Dynamic management makes it possible to offer greater portfolio stability and a better balance between the active and passive components of a pension fund. This adaptive approach results in active control of portfolio volatility, which minimizes losses and results in shorter recovery times.
Mandates, indices and VLPP funds
Asset allocation mandates (known as VLPP mandates) refer to the world of occupational pension provision and mixed mandates, the composition of which is based on LPP indices. But Fundo's particularity is to offer tailor-made management that adapts to any type of strategic allocation, determined in partnership with the client. Fundo manages a risk budget, based on its variable exposure to certain asset classes. When risk increases, the weighting favours the least volatile asset classes (bonds and cash). If the risk decreases, exposure to the most volatile asset classes (equities) increases, in order to consume the entire risk budget allocated to the portfolio.
For institutional clients used to managing in the form of mandates or balanced funds, Fundo has created the Fundo VLPP fund under Swiss law, based on the same approach as VLPP mandates. This collective investment product allows the funds to access Fundo's VLPP methodology, even for small investments.
The construction of the Fundo VLPP family indices is based on the logic used to establish those of the LPP 2000 family published by Pictet & Cie. Controlling volatility, combined with rebalancing between asset classes according to risk trends, allows the Fundo VLPP index to outperform the Pictet LPP 25 and LPP 40 indices, with a reduced volatility of around 25%.
Integrated risk protection (mandates, funds or certificates)
For institutional clients who already have portfolio management structures that satisfy them, Fundo offers additional protection in the form of Risk Overlay. Fundo measures a portfolio's exposure to equity risk on a daily basis and takes hedging measures, if necessary, to temporarily reduce this exposure and protect the portfolio during periods of significant fluctuations. This methodology provides portfolios with greater resilience in the event of strong market turmoil while limiting the largest losses.
Specific mandates for international markets
Long Only mandates are based on the same methodology as Risk Overlay mandates. However, in addition to hedging, they include Fundo's management of a portfolio of international equities (United States, Europe, Japan, United Kingdom, Switzerland, Australia and Canada) representing all or part of the pension fund's allocation in this asset class. As with the other products in the algorithmic management range, this dynamic makes it possible to improve the portfolio's risk/return ratio and increase the predictability of its evolution.