Diversification both geographically and in asset types is key, since there is no asset that consistently performs better than the rest.
Throughout history, both in the academic world and in the financial industry, it has been confirmed that the correct selection of asset types is the most important factor in the performance of a portfolio. The chart below highlights the returns per year for each asset class. It clearly illustrates how the best performing assets from 2001 to 2020 varied over time.
| 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Fixed income 8.4% |
Fixed income 10.3% |
Sm cap 47.3% |
Int'l 20.3% |
Int'l 13.5% |
Int'l 26.3% |
Lg cap growth 11.8% |
Fixed income 5.2% |
Lg cap growth 37.2% |
Sm cap 26.9% |
Fixed income 7.8% |
Lg cap value 17.5% |
Sm cap 38.8% |
Lg cap core 137% |
Lg cap growth 5.7% |
Sm cap 21.3% |
Lg cap growth 30.2% |
Cash 1.9% |
Lg cap growth 36.4% |
Lg cap growth 38.5% |
Lg cap core 28.7% |
Cash 1.5% |
| Cash 4.4% |
Cash 1.8% |
Int'l 38.6% |
Sm cap 18.3% |
Lg cap value 7.1% |
Lg cap value 22.3% |
Int'l 11.2% |
Cash 2.1% |
Int'l 31.8% |
Lg cap growth 16.7% |
Lg cap growth 2.6% |
Int'l 17.3% |
Lg cap growth 33.5% |
Lg cap value 13.5% |
Lg cap core 1.4% |
Lg cap value 17.3% |
Int'l 25.0% |
Fixed income 0.0% |
Lg cap core 31.5% |
Sm cap 20.0% |
Lg cap growth 27.6% |
Lg cap value -7.5% |
| Sm cap 2.5% |
Div portfolio -9.8% |
Lg cap value 30.0% |
Lg cap value 16.5% |
Div portfolio 5.4% |
Sm cap 18.4% |
Fixed income 7.0% |
Div portfolio -22.8% |
Sm cap 27.2% |
Lg cap value 15.5% |
Lg cap core 2.1% |
Sm cap 16.4% |
Lg cap value 32.5% |
Lg cap growth 13.1% |
Fixed income 0.6% |
Lg cap core 12.0% |
Lg cap core 21.8% |
Lg cap growth -1.5% |
Lg cap value 26.5% |
Lg cap core 18.4% |
Lg cap value 25.2% |
Fixed income -13.0% |
| Div portfolio -4.8% |
Lg cap value -15.5% |
Lg cap growth 29.8% |
Lg cap core 10.9% |
Lg cap growth 5.3% |
Lg cap core 15.8% |
Div portfolio 6.0% |
Sm cap -33.8% |
Lg cap core 26.5% |
Lg cap core 15.1% |
Div portfolio 1.8% |
Lg cap core 16.0% |
Lg cap core 32.4% |
Div portfolio 8.1% |
Div portfolio 0.1% |
Div portfolio 8.7% |
Div portfolio 15.1% |
Lg cap core -4.4% |
Sm cap 25.5% |
Div portfolio 14.7% |
Sm cap 14.8% |
Int'l -14.5% |
| Lg cap value -5.6% |
Int'l -15.9% |
Lg cap core 28.7% |
Div portfolio 10.5% |
Lg cap core 4.9% |
Div portfolio 13.0% |
Lg cap core 5.5% |
Lg cap core -36.9% |
Div portfolio 20.8% |
Div portfolio 13.0% |
Lg cap value 0.4% |
Lg cap growth 15.3% |
Int'l 22.8% |
Fixed income 6.0% |
Cash 0.1% |
Lg cap growth 7.1% |
Sm cap 14.7% |
Div portfolio -4.7% |
Int'l 22.0% |
Int'l 7.8% |
Div portfolio 13.9% |
Div portfolio -16.3% |
| Lg cap core -11.9% |
Sm cap -20.5% |
Div portfolio 23.5% |
Lg cap growth 6.3% |
Sm cap 4.6% |
Lg cap growth 9.1% |
Cash 5.0% |
Lg cap core -37.0% |
Lg cap value 19.7% |
Int'l 7.8% |
Cash 0.1% |
Div portfolio 12.2% |
Div portfolio 20.3% |
Sm cap 4.9% |
Int'l -0.8% |
Fixed income 2.7% |
Lg cap value 13.7% |
Lg cap value -8.3% |
Div portfolio 22.0% |
Fixed income 7.5% |
Int'l 11.3% |
Lg cap core -18.1% |
| Lg cap growth -20.4% |
Lg cap core -22.1% |
Fixed income 4.1% |
Fixed income 4.3% |
Cash 3.1% |
Cash 4.9% |
Lg cap value -0.2% |
Lg cap growth -38.4% |
Fixed income 5.9% |
Fixed income 6.5% |
Sm cap -4.2% |
Fixed income 4.2% |
Cash 0.1% |
Cash 0.0% |
Lg cap value -3.8% |
Int'l 1.0% |
Fixed income 3.5% |
Sm cap -11.0% |
Fixed income 8.7% |
Lg cap value 2.8% |
Cash 0.1% |
Sm cap -20.4% |
| Int'l -21.4% |
Lg cap growth -27.9% |
Cash 1.2% |
Cash 1.3% |
Fixed income 2.4% |
Fixed income 4.3% |
Sm cap -1.6% |
Int'l -43.4% |
Cash 0.2% |
Cash 0.1% |
Int'l -12.1% |
Cash 0.1% |
Fixed income -2.0% |
Int'l -4.9% |
Sm cap -4.4% |
Cash 0.3% |
Cash 0.9% |
Int'l -13.8% |
Cash 2.3% |
Cash 0.7% |
Fixed income -1.5% |
Lg cap growth -29.1% |
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In previous years, sophisticated investment solutions were offered only at the institutional level; however, solutions are currently available to the general public.
Globally, investors are turning away from financial products that offer limited investment opportunities and focusing on a global portfolio model.
Nowadays, anyone who wants to invest has access to the globally diversified portfolio solution.
The Portfolio Models are designed by Credicorp Capital. The purpose of this Portfolio Model is to offer results for the investor with efficiency, transparency, and profitability. The UCITS ETFs that have been selected are part of the Portfolio Model designed to meet specific objectives such as global diversification, tactical investments and tax efficiency. The platform guides each investor on how to invest and which are the most appropriate instruments for their profile. The asset selection process is based primarily on market exposure, tax efficiency and cost of the instrument, analyzing more than 300 UCITS ETFs.
The variables in the optimization process are performance-risk-efficiency
The construction of the Credicorp Capital portfolios is a process based on the balance of returns and risks designed by our Portfolio Solutions team, which is divided into four stages.
Risk Profile
At the time of opening the account, a few questions are asked, our algorithms automatically recommend a Model Portfolio that is in accordance with risk tolerance, objectives and investment horizon. This information allows you to create an optimal portfolio of UCITS ETFs that adapts to your profile and financial objectives. Once the account is open, the client can switch to the different available portfolios as many times as they wish at no cost.
Investment Vehicles
To achieve global diversification, different financial assets are used, seeking to have the least possible correlation. This is why portfolios are made up of UCITS ETFs. Regularly, the universe of UCITS ETFs in the Model Portfolios is reviewed to identify the most appropriate ones to represent each of the asset classes. The Model Portfolios include the UCITS and ETFs that offer market liquidity, minimize tracking error and are tax efficient.
Asset Allocation
Based on the investment process and after an in-depth analysis of each financial asset, taking the Credicorp Capital guidelines for portfolio design as a guideline, the ideal composition is determined and thus achieve the highest possible return according to the risk profile defined by the investor. The goal is to create an asset allocation that produces the highest return possible, while respecting your particular risk tolerance. Translating investor outcomes and constraints into globally well-diversified allocations: Return - Risk - Cost.
Monitoring and Rebalancing
To keep the portfolios in line with long-term goals, they are constantly monitored and regularly rebalanced to maintain their original mix. This way the return is optimized according to the expected level of risk.
UCITS ETFs are financial instruments registered in Europe that typically track an index, usually of stocks, bonds or other assets. UCITS ETFs are publicly traded and trade like stocks. UCITS ETFs provide excellent diversification, ample liquidity, transparency, and are tax efficient.
We only use UCITS ETFs that have a defined mandate to passively track the index it seeks to track. This restricts the administrator to only replicate the performance of the index that follows, thus achieving the same diversification.
