Focus on the BL Global Flexible EUR fund, an active, conviction-based, non-benchmarked approach
BL Global Flexible EUR combines asset classes that are often inversely correlated (equities, bonds precious metals and cash) with the aim of generating attractive medium-term yield through a flexible and global allocation strategy.
The strategy implemented by Guy Wagner, who has been managing the fund since its launch in 2005, is based on the founding investment principles of BLI – Banque de Luxembourg Investments: active, conviction-based management, focused on the long term and on reducing downside risk.
The Fund effectively withstood the market downturn in March 2020, participated fully in the recovery and then made sustained progress over the rest of the year. In early 2021, however, the Fund experienced a few difficulties related to January and February’s sharp rally in cyclical sectors and value stocks, as well as the underperformance of gold companies. However, from March onwards, the Fund began to outperform again, primarily thanks to its stock picking in Europe and Asia.
Thus, at the end of August 2021, it reported YTD performance (B units, net of fees) of 9.3%, versus a rise of 7.9% for the average in its Lipper category (Lipper Global Mixed Asset EUR Balanced).
With economies gradually recovering and the global health situation stabilising, the manager is keeping equity allocation high (67.7% at end-August); the manager continues to favour the latter despite the strained valuations and the prospect of returns being lower over the next ten years than in the past.
The manager is also maintaining bond positions (5.5% as at end-August) for risk diversification and reduction purposes. Indeed, despite the low bond yields, long-term US Treasury bills could offer interesting upside potential if the country’s economic activity were to slow. And finally, gold continues to play a significant role in the portfolio’s construction (13.2% as at end-August) as a reliable investment in times of monetary and financial turmoil, as well as a hedge against inflationary risk. As a reminder, the manager does not take on direct exposure to precious metals, but instead prefers investments in traditional gold producers and companies with royalties.