Lombard Odier: High performance from low risk
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Lombard Odier: High performance from low risk

Lombard Odier Darier Hentsch’s US dollar, low-risk portfolio caters to high-net-worth clients who want to preserve their money over the long term but are also looking for performance.

Jacques Raemy, executive vice-president and head of private asset management at LODH Jacques Raemy: “Asymmetrical vehicles such as hedge funds, convertibles or structured products have enabled us to optimize our portfolio”

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Although based in Switzerland, LODH has clients with a US dollar currency base from regions where the local currency is dollar-related or experiences low volatility with the US dollar, such as Latin American or Asia. Achieving solid returns with a low-risk mandate is not an easy task given the higher allocation to fixed income and cash required, but LODH successfully outperformed its peers and the FTSE Private Banking Index Americas (USD) Low-Risk index in 2006 by having a solid bedrock of short duration securities and cash, diversifying its portfolio internationally and allocating to alternative assets such as hedge funds, commodities and structured products.

About 20% of the portfolio is invested in equities, 20% in alternatives, and 10% in cash. The remaining 50% is allocated to fixed income.

“With the US yield curve flat to inverted, the incentive to take risk at the end of the curve is not as big,” says Serge Ledermann, CIO, partner and head of investments at LODH.

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