NN (L) Patrimonial Balanced: success in turbulent years
NN Investment Partners’ Multi-Asset team has managed The NN (L) Patrimonial Balanced Fund since 2008. For more than five years in a row, the fund has received 4 or 5 Morningstar Stars. The team’s stability, years of experience and continuous drive to learn and innovate are the most important factors contributing to this success. The team has evolved strongly during this period and can compete with the best in the industry.
The fund is managed by Jan Kvapil and Siu-Kee Chan. They are part of the Multi-Asset Team consisting of 12 portfolio managers and 6 strategists. It is one of the largest Multi-Asset teams in Europe with a strong track record. Siu-Kee Chan looks back on the developments in recent years and explains how the fund has been able to perform consistently despite the economically turbulent years. He goes on to discuss its future strategy.
Net fund performance and overall Morningstar rating
(Patrimonial Balanced, P-Cap)
Source: Morningstar 16-1-2018 (Please note that past performance is not a reliable indicator of future results)
Siu-Kee Chan, Senior Portfolio Manager Multi-Asset at NN Investment Partners, commented: “To be able to respond quickly to changing market conditions, it is important for the Multi-Asset team to continuously learn and innovate. In recent years, for example, we have expanded our expertise in sentiment indicators by analysing investor behaviour, their positioning but also by making use of ‘big data’ to identify emotions. We have developed two indicators that reflect the emotion in the market. These are based on data from social media and professional digital media. Combining the sentiment analysis and economic fundamental analysis gives us a better understanding of the financial markets and enables us to identify investment opportunities at an early stage.”
Despite a number of economically turbulent years, the fund’s performance has been stable and consistent. Chan explained: “Stability and consistency may be boring concepts for many, but for us as investment specialists these are core values. It means that we were able to add value, even during volatile markets. Looking back on the past ten years, it is striking that the fund has performed well in times of unusual events. For example, we focused on the ‘search for yield’ theme in the period just after the euro crisis, when the ECB announced its ‘long-term refinancing operations’ in early 2013. More recent examples are the hedges we set up just before the Brexit referendum and the US elections. Ultimately, we often made the right decisions, which resulted in good performance and five Morningstar Stars for the fund. Obviously this is just a snapshot of past performances in an infinite game. That is why it is important to keep our sights on the future.”
The NN (L) Patrimonial Balanced Fund is managed by a strong team with a proven process that knows how to adapt to the evolving financial landscape. Chan added: “The emphasis is currently on strategies that fit a more mature stage in the economic cycle. The global economy is strong and we anticipate higher interest rates due to central banks gradually normalising their monetary policies. In such an environment, we have a preference for equities and we are cautious about positions with interest rate risk. This is also reflected in our sector positioning within equities, for which we prefer cyclical sectors and the financial sector. I look forward to the future with confidence.”
NN (L) Patrimonial Balanced is a sub-fund of NN (L) Patrimonial (SICAV), established in Luxembourg. NN (L) Patrimonial is duly authorized by the Commission de Surveillance du Secteur Financier (CSSF) in Luxembourg. The fund has been notified to the Netherlands Authority for the Financial Markets (Autoriteit Financiële Markten, AFM). Several share classes of the sub-fund are currently registered in Luxembourg, The Netherlands, Hungaria, France, Greece, Belgium, Spain, Sweden, Peru, Chili and Austria.
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