# Investment manager’s report for the financial year ended 31 July 2021
The Sub-Fund’s investment objective is to provide shareholders with long term capital growth from the Portfolio Strategy (as
defined below) and to deliver protection at 85% of the highest Net Asset Value per Share ever achieved by the Sub-Fund.
The Portfolio Strategy is a multi-asset portfolio which consists of investments in fixed income, equities, foreign exchange and alternative assets including ETFs, determined from time to time by Movestic Kapitalforvaltning AB (the “Sub-Investment Manager”) and exposure to cash.
The allocation between the portfolio and cash is rebalanced following a volatility control mechanism. The volatility budget (i.e. the maximum allowed level of annualised standard deviation of the Portfolio Strategy) is lower than or equal to 5% over the term of the investment.
Please find below an extract of the Sub-Investment Manager’s report on the discretionary strategy:
“Avancera 85 is a mutual fund with a derivatives-based protection on the downside in the form of a right to sell the fund at 85% of its maximally reached NAV. The fund pays for this protection which means it has the possibility to concentrate its holdings in assets with the highest expected returns.
As a sub investment manager we allocate to cost-efficient ETF’s, indices and strategies and allocates between those based on the expected long term return of the individual asset classes that are represented, taking the combined volatility of the portfolio into account. Basically we are trying to optimize the net return to the unit holders taking the expected return and the expected net exposure that the portfolio will receive into account.
The period was characterised by continued positive performance by risky assets in general and a less volatile period, although we’ve seen a number of dips. The market however has been inclined to buy those dips and equity markets over – most of – the globe has fared well. Fixed income, especially American, has actually been more volatile, or at least more interesting with the UST10 going from circa 1% at year end to circa 1.7% in March to fall back to approximately 1.3% at H1. Those moves are of course a reflection of the uncertainty for the US inflation outlook.
Avancera 85 was down by 0.19% since June last year. The asset portfolio that we manage were up by 8.2% before FX. Positive contribution mainly from equities and primarily from our global exposures. At the same time most of fixed income, especially treasuries and high-quality IG has detracted from performance.
Going forward we see the cycle moving into the expansion phase – a period with more subdued and less spectacular returns but still a period to overweight equities. It is also a period that historically hasn’t been the best for high yield and we have taken that down a bit and might do more of that as long as we find reasonable alternatives for the proceeds. We still think that long term returns will disappoint the average investor from here but we are still in an environment where it is unlikely that those disappointments will materialize, i.e we believe that we will continue to see a rise, albeit slower, in equities in general. With regards to fixed income, expansion is a worse period and the latest downswing in US – both nominal and real – yields remain a bit of a conundrum given the latest inflation prints. We are in the transitory camp when it comes to inflation but still see circa 1.3% on the UST 10 as too low given the uncertainties with respect both to the length and strength of the transitory period. This means that we do see short term risk in rates at these levels even if we believe that the long-term upside in yields is limited from here.”
As at 31 July 2021 the Sub-Fund’s exposure to the Portfolio Strategy is 110.94% with an average exposure since launch of 87.89%.
The Sub-Fund was launched on 9 May 2019.
From 9 May 2019 (its inception) to 31 July 2021, the performance of the Sub-Fund is -1.29%.
From 20 May 2019 (since the fund has been exposed to the underlying strategy) to 31 January 2020, the performance of the Sub-Fund is -1.29%.
From 31 July 2020 to 31 July 2021, the performance of the Sub-Fund is 0.92%.
From 20 May 2019 (since the fund has been exposed to the underlying strategy) to 31 July 2020, the Sub-Fund has an annualised volatility of 5.53%.
Movestic Avancera 85

Translation (ENDE, 2021-07-31):
# Bericht des Anlageverwalters für das Geschäftsjahr zum 31. Juli 2021
Das Anlageziel des Teilfonds besteht darin, für die Anteilinhaber ein langfristiges Kapitalwachstum aus einem Multi-Asset- Portfolio zu erwirtschaften und einen Schutz in Höhe von 90 % des höchsten jemals vom Teilfonds erzielten Nettoinventarwerts („NIW“) je Anteil zu bieten (der „Mindestziel-NIW“).
Die Portfoliostrategie besteht aus Long- und Short-Positionen in einem Portfolio aus Wertpapieren und anderen Vermögenswerten nach einem systematischen Mechanismus. Dieser Mechanismus teilt die Gewichtungen einer Aktien- Anlagegruppe, einer Renten-Anlagegruppe und einer Barkomponente zu, wie in der Ergänzung des Teilfonds dargelegt. Der Mechanismus zielt darauf ab, die erwartete lisierter realisierte Volatilität der Portfoliostrategie nahe 5 % zu halten.
Zum 31. Juli 2021 betrug das Engagement des Teilfonds in der Portfolio-Strategie 108,14 %, wobei das durchschnittliche Engagement seit Auflegung bei 100,32 % lag.
Der Teilfonds wurde am 22. Januar 2020 aufgelegt.
Vom 22. Januar 2020 (Auflegung) bis 31. Juli 2021 betrug die Performance des Teilfonds auf -3,56 %. Vom 31. Juli 2020 bis zum 31. Juli 2021 belief sich die Wertentwicklung der Anteilsklasse auf -0,37 %. Der Teilfonds weist eine annualisierten Volatilität von 2,02 %.
Pergola 90