The sub-fund (LF) Fund of Funds Balanced Step In has a 5-year investment term and matures on 31.03.2031. It aims to achieve capital returns through investments in government and corporate bonds with the euro as the base currency. Gradually it gains exposure to equities through investments in units of mutual funds from foreign firms. Investment choices are made with a focus on balancing return and risk, within a diversified portfolio. It is authorised in Luxembourg.
The subscription period ends on 31.03.2026.
Investment objective
The sub-fund follows an investment strategy based on a gradual entry into the markets, aiming for optimal risk management and long-term portfolio growth. This strategy is divided into 3 phases:
- 1st Investment Cycle (Year 1) – The approach remains conservative. Investments focus mainly on bonds, with limited exposure to equity mutual funds (up to 10%). The goal is stability and a gradual market entry without high volatility.
- 2nd Investment Cycle (Years 2–3) – The portfolio takes on a more balanced character. Exposure to equity mutual funds increases progressively, aiming to enhance returns and diversify risk. This strategy achieves a combination of stability and growth.
- Final Investment Cycle (Years 4–5) – Management becomes more active and flexible. The increased participation in equity markets seeks to capitalise on opportunities offered by the investment environment. The strategy remains disciplined and adaptive, considering current market conditions and outlook.
Portfolio Structure
The (LF) Fund of Funds Balanced Step In invests over 35% of its assets in government bonds issued by European Union member states.
It may also invest up to:
- 20% in corporate debt securities issued by companies listed on regulated markets worldwide.
- 50% in sub-investment grade debt securities, aiming to enhance returns. Securities that are in default or bankruptcy are excluded, with the aim on maintaining a balanced relationship between risk and safety.
The sub-fund gradually acquires equity exposure by selecting mutual funds managed by leading international asset managers, who primarily invest in stocks expected to benefit from developments in major global trends and thematic strategies.
During the 1st year, equity exposure is up to 10% of the portfolio. From the 2nd year onward, equity exposure increases quarterly, aiming to reach at least 50% of the assets by the end of the 3rd year. If a significant decline in equity markets occurs during this period, the increase in equity exposure may be accelerated to take advantage of emerging opportunities. After the 3rd year, the strategy becomes more flexible, with the equity exposure maintained between 35% and 65% of the portfolio, depending on market conditions and outlook.
Investor profile
It is addressed to investors who seek capital gains by primarily investing in bonds, while gradually gaining exposure to the equity market. These investors should be willing to accept the risks associated with their investment and be prepared to maintain their investment until the maturity date of the sub-fund.
Investing in financial instruments involves risks. The initial value of an investment and its return may fluctuate, potentially resulting in the loss of invested capital.
