Econopolis Total Return Fund (ETRF) is a flexible mixed fund that invests using a total return approach that focuses on capital preservation and stable asset growth.
The fund comprises an actively managed, robust portfolio in which diversification and risk management play an important role. The fund brings together the knowledge and expertise of Econopolis in asset allocation, equity and bond selection, and portfolio management.
Unique investment process
We live in a world full of challenges and opportunities; the future is unknown and unpredictable. That is why it is important to carry out thorough economic analyses to chart the various outcomes and possible scenarios. Diversification and flexibility are important key words that we value highly. They help us to anticipate the various economic scenarios. We believe in the power of teamwork and the ETRF is therefore run by a team of experts with complementary skills. After all, the world is too large to grasp by ourself. Simply following an index is not part of our investment philosophy. We do not invest in countries, industries or companies just because they are part of an index; we only invest in our own convictions.
Economic analysis & market insights
Our team of economists keeps a close eye on the financial and economic climate in which we find ourselves and charts the opportunities and potential risks. We add to this our market insights from our bond and equity experts. They look at the extent to which the economic cycle has already been priced in, in financial assets. This gives us a global picture of the economic cycle and the current state of the financial markets.
We then determine our potential return drivers. We look for different return drivers that generate returns in the different outcomes of our economic analysis. This way, we can select asset classes that will perform well given the economic context for short-term, medium-term and long-term investment horizons.
Robust “all-weather” portfolio
We construct a robust portfolio containing sufficient return drivers. We also check that the weights of the positions are properly scaled and that no one return driver dominates. Furthermore we look for investment ideas that generate returns over different time frames. This way we add extra diversification to the fund, and construct a robust, balanced portfolio that will perform well whatever the “economic” weather.
Disciplined decision-making process
One of the key elements in our investment process is an extensive financial analysis which forces us to be disciplined about valuations. We do not simply chase momentum in markets or investments that do not meet our valuation standards. We invest in our convictions. We use a dynamic and disciplined decision-making process and scale the various return drivers sensibly. Our experts review and analyse each driver on a daily basis.
Why Total Return Fund?
Investing over time
In an environment where achieving positive real returns is becoming more and more difficult, you need to implement an investment policy that can adapt to the current financial landscape. We do this by making a distinction in our portfolio between short-term, medium-term and long-term investments. In addition to investments that will be long-term winners, there is space in the portfolio for active management of short-term opportunities and a value approach for the medium-term. This results in a diversified and resilient portfolio, with an emphasis on capital preservation through active management and aiming for long-term positive returns.
Active risk management, safe haven
The fund managers invest in equities, bonds and also use derivatives. This latter category acts as an overlay or protective element to act as a hedge when needed. We manage the risk actively and are able to adjust the portfolio and protect it if necessary against sharp falls.
Broad diversification in the portfolio
Our team of specialists manages the portfolio with the broadest possible opportunity set in asset allocation, asset selection (no geographic or sector restrictions) and time frame. Not more than 50% of the fund is invested in equities. We only invest in publicly-traded securities and bonds and hold a large number of positions.
The word balance is key to our management of the fund. Balance between risk and return. Balance between equities and bonds. Well-balanced positions by currency, country, industry and security. We strive relentlessly to keep finding the right balance in the changing economic conditions in which we are living. After all, balance gives peace of mind.
Characteristics and fees
- Name: Econopolis Total Return
- Type: Luxembourg SICAV
- Capitalisation (ISIN: LU1248450501) and distribution (ISIN: LU1248450766)
- Launch date: 07/07/2015
- Weekly net asset value (NAV)
- Management fees I-class: 0.5%
- No entry fees, no exit fees
- Performance fees: 10% over the excess return (high water mark & no reset)
I-class reserved for institutional investors
- The fund is based on the total return principle geared to stable capital growth.
- The fund composition is based on strong convictions and well-founded insights gained from economic analyses and market insights.
- The fund invests in global equities, bonds and financial derivatives, carefully selected from a position of independence.
- No more than 50% of the fund is invested in equities and up to a maximum of 10% is invested in other funds.