Strategy overview

BL Global Flexible EUR is a flexible asset allocation fund that aims to generate an attractive return over the medium term.

The Fund invests in asset classes that are often inversely correlated, each having a specific, role to play within the portfolio depending on the market context:

  • Equities: main driver of long-term performance;
  • Bonds: stability factor in times of stock market turbulences;
  • Gold (via gold stocks): protection against macroeconomic / geopolitical / systemic risks;
  • Cash: reserve to invest when opportunities arise.

Finally, BL Global Flexible EUR is an Article 8 fund according to SFDR regulation. It integrates ESG factors at different stages of the investment process and is committed to investing a minimum of 20% of its assets in assets considered sustainable (according to BLI's internal methodology).

Performance overview

Note: Performance data net of fees (B units) in EUR. Past performance is not a guide to future performance. References to a market index or peer group are for comparison purposes only; the market index is not mentioned in the sub fund's investment policy.Source: BLI/Lipper.

The year 2022 was shaken by major geopolitical tensions, a change in the tone of the central banks leading to a rapid rise in rates in a context of strong inflationary pressures.
For the first time since 1969, equity and bond markets fell at the same time, challenging asset allocation funds investing in these two traditional asset classes.

In this context, in 2022, the BL Global Flexible EUR fund (retail B share class) posted an annual performance of -10% against a -13.7% drop in its Lipper universe of comparable funds (Lipper Global Mixed Asset EUR Flex - Global), thus cushioning the overall decline in global equity markets over the period.

- Cumulative performance in 2022 -

Over the longer term, the Fund offers a performance of +1.8% over 3 years and +18.6% over 5 years (against a performance of -4.2% and -2% respectively for its Lipper category).

Performance Analysis

For the whole of 2022, the gross equity exposure (on average 73% over the period) weighed on the Fund's performance in a difficult environment for global stock markets. However, hedging part of this exposure with equity index futures helped to contain the decline in the first half of the year and to limit volatility in the second half of the year.

The allocation to long-dated sovereign bonds remained limited but had a slight negative impact over the year.

By contrast, the precious metals component invested in gold companies had a slightly positive impact over the year as a whole, thanks to the recovery in gold prices in the second half of the year.

Within the equity bucket, geographic allocation (limited US exposure and European bias) as well as sector allocation (overweight Healthcare and Consumer staples and underweight Technology and Communication services) contributed positively.

At the level of the main individual detractors, stocks come from developed and emerging countries, in the Healthcare (Roche), Technology in the broad sense (Sony, Alibaba, Alphabet, Amazon, Taiwan Semiconductor, Samsung Electronics, Accenture) and Consumer staples (Nestlé) sectors.

The best individual positive contributions came from various countries (United States, China, Denmark and Thailand), in the Healthcare (Gilead, Novo Nordisk, Johnson & Johnson), Technology (Check Point Software, Travelsky Technology) and Consumer (Thai Beverages) sectors, as well as the gold stocks (Royal Gold, Franco Nevada, Agnico Eagle Mines).

Recent developments and positioning

At the end of December 2022, the Fund's allocation was as follows:

  • Equities:
    • Gross exposure: 71.21%
    • Net exposure: 45.99% (thus hedging equity risk up to 25.2%)
  • Fixed Income: 9.82%
  • Gold stocks: 13.53%
  • Cash: 5.43%
During the year, the asset allocation changed according to the following main axes:
  • In a context of strong geopolitical tensions, reduction of net equity exposure via hedging strategies (index futures) in February and March
  • In the second half of the year, bond allocation increased (September and October), taking advantage of the weakness of the US bond markets. This component remains solely invested in long dated US sovereign bonds. The bond weighting will continue to evolve in line with economic development and the level of bond yields;
  • A slight increase in investments in gold stocks, as a reliable investment in times of monetary and financial turmoil.



The economic environment remains fragile for financial markets, given the current risk of economic slowdown or even recession. After years during which central banks' objectives (to combat the risk of deflation and stimulate growth) were very favorable to financial markets, the situation has fundamentally changed. The monetary authorities have initiated a rapid and significant rise in their key rates, in order to counter the surge in inflation, even if it means taking the risk of curbing economic growth. Uncertainties also persist in the geopolitical, energy and commodity resource spheres..

At this stage, even though equity valuations have decreased as a result of market declines in 2022, this asset class remains dependent on global economic developments: a soft landing with a moderate reduction in growth and the end of monetary tightening remains a possible positive scenario with corporate earnings relatively unaffected, but the risk of a recession remains with a greater impact on corporate earnings. In this context, the Fund Manager does not rule out a decline in investors’ risk appetite and a deterioration in corporate profitability.

In this context, the Fund Mnaager maintains an equity-oriented management style while maintaining part of the equity exposure hedged as a precaution. In terms of opportunities in this asset class, the Fund Manager believes that the Japanese market is interesting with many quality companies and a structurally undervalued currency (the yen). he still favours high quality companies that are able to stand out from competition, benefit from sustainable higher profit margins, generate more free cash flow and financially self-sufficient: these companies should be able to withstand better in the event of a more marked economic slowdown.

Author: Guy Wagner, CIO & Flexible Portfolio Manager at BLI,

The author of this document is employed by BLI - Banque de Luxembourg Investments, a management company approved by the Commission de Surveillance du Secteur Financier Luxembourg (CSSF).

Final drafting date: 27 January 2023
Publication date: 09 February 2023 - 12H00

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