Helping you navigate the financial markets at a time of uncertainty
Financial investment requires being alert and attentive to market trends so that asset allocations can be adjusted ahead of market movements. This precaution is even more important during uncertainty, as we are experiencing today. How are portfolio managers dealing with this new environment? What are the solutions to assist clients? Omid Zafaranlou, Digital Advisory Director at Societe Generale Private Banking, sheds lights on these questions and more. Together with a team of experts, Omid Zafaranlou heads up Synoé(1), our digital solution that sends clients regular arbitrage advice for their life insurance policies and when an exceptional market event occurs.
It was a difficult year across the board — geopolitical and inflationary shocks, tightening monetary policies, lower valuations, slower economic growth, and an energy crisis — and led to a historic bond market correction. 2022 was a reminder that the binary approach to liquid assets (bonds and stocks) is not enough to protect portfolios against such volatility(2), and that is absolutely essential to include other asset classes in allocations in times like these.
We responded to these events by stepping up our support for our clients to answer their questions, make sense of the macroeconomic context, and reposition their medium- and long-term investments in a timely and agile manner.
While we continue to face headwinds in 2023, we cannot rule out the possibility of an upswing, which would bring lower inflation, milder monetary policy, and even pleasant surprises for company earnings.
Our selection of funds is based on the positions taken by the Private Bank’s investment strategy team. It holds its Global Investment Committee meeting at least once a month to determine its convictions by asset and sub-asset class.
We build our benchmark allocations in collaboration with the asset management company SG 29 Haussmann(3). It offers a vast investment universe of choice open-architecture bond and equity funds, allowing us to benefit from the expertise of carefully-selected partners.
The result is swift, spot-on support for our clients, thanks to the experience and skills of our portfolio managers and economy specialists.
DO YOU ONLY LOOK AT FINANCIAL CRITERIA WHEN CHOOSING POSITIONS?
Financial criteria are core to our position choices; but they are not enough in today’s market environment. That’s why we also incorporate non-financial criteria in line with ESG(4) standards to build our benchmark allocations — a choice based on our convictions and in compliance with recent regulatory requirements. Building sustainable portfolios is especially advantageous in the long run because they reduce exposure to controversy risk.
Synoé factors in these non-financial criteria when determining its investment universe, and work in open architecture with external asset management companies, recognised for their expertise in sustainable finance. For example, 16 of our 19 investment funds in our Équilibrée allocation of December 2022 comply with Articles 8 or 9 of the Sustainable Finance Disclosure Regulation, SFDR(5). Ten of these investment funds are also SRI certified(6).
If you would like to find our more about Synoé, speak to your Private Banker.
(1) Access to the Synoé solution is subject to certain eligibility conditions, as well as service fees for advice and access to experts.
(2) Volatility: fluctuations in the price of a financial assets.
(3) Authorised by the AMF at end-2006, SG 29 Haussmann is the asset management entity dedicated to Societe Generale Group’s network and Private Banking France clients, as well as some of the Group’s institutional clients.
(4) ESG (Environmental, social and governance) criteria are used to take into account sustainable development and long-term factors in the strategy of market participants (companies, public authorities, etc.).
(5) The Sustainable Finance Disclosure Regulation is a European regulation aimed at improving transparency on environmental and social responsibility in the financial markets. Under the SFDR, all products must be classified according to their characteristics: Article 6 products do not have sustainability characteristics; Article 8 products promote general sustainability characteristics; Article 9 products have environmental and social sustainability as their stated objective.
(6) The SRI (socially responsible investment) label was launched by the French Ministry for the Economy and Finance in August 2016. It is awarded after a strict certification process overseen by two independent bodies (Afnor Certification and EY France). The label gives investors better visibility of SRI products by guaranteeing that they are managed using sound methodologies, adhere to demanding transparency requirements, and include high-quality information. More information on the SRI certification granted by the French State is available on the dedicated website.
Would you like to discuss this subject further with us?
GENERAL WARNING
This is an advertising document, which holds no contractual value. It is not intended to provide an investment service, does not constitute investment advice nor a personal recommendation in insurance, nor any form of canvassing, nor legal, tax or accounting advice from Societe Generale Private Banking France.
The data contained in this document is provided for information purposes only, are subject to change without notice, and are aimed at helping guide the decision-making process. Under no circumstances does any information on past performances contained in this document guarantee future performances. Before acquiring any investment service, financial product or insurance product, potential investors (i) must read all the information contained in the detailed documentation on the service or product under consideration (prospectus, regulations, "Key Investor Information Document", Term Sheet, contractual terms of the investment service, etc.), paying particular attention to that concerning the associated risks; and (ii) consult with their legal and tax experts to assess the legal and fiscal implications of the product or service under consideration. Investors shall obtain more detailed information from their Private Banker who can also assist in determining eligibility to the product or service under consideration which may be subject to conditions, and whether such product or service meets their needs. Accordingly, Societe Generale Private Banking shall under no circumstances be held liable for any decision made by an investor on the basis of this information alone. These forecasts about future performances are based on assumptions which may not be realised.
The scenarios presented are estimates of future performance, based on historical data on how the value of an investment varies and/or on current market conditions, and are not precise indications. The yield obtained by investors is susceptible to change depending on the performance of the market and on the holding period of the investment by the investor. Future performance may be subject to tax in accordance with the personal situation of each investor and is susceptible to change in the future.
For a more comprehensive definition and description, please refer to the prospectus of the product or, if necessary, to other regulatory documentation (where applicable) before making any investment decisions.
This document is confidential and intended solely for the recipient; it may not be made public or disclosed to any third party and may not be reproduced in whole or in part without the prior written agreement of Societe Generale Private Banking. Click here for more information.
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