LCI Annual Strategy Review December 2021
Performance Overview
2021 was a decisively equity-driven year for the LCI multi-asset range. Developed-market equities — led by the United States and Canada — powered every strategy’s return, while a defensive bond core and emerging/Latin American exposure capped the upside as government bond yields rose. Strategy returns ranged from roughly +4% (Yield CHF/USD) to +20% (Growth EUR), with every sleeve gaining over the year. The strategic allocation was held constant throughout 2021; all dispersion came from market beta and currency, not from tactical changes. Currency was the swing factor across base currencies: a strong USD lifted EUR-denominated strategies (unhedged dollar exposure), was broadly neutral-to-mildly-positive for CHF strategies, and was a headwind for USD strategies holding non-dollar assets.
Performance - 2021
Semi-Passive (S) | Active-Enhanced (SE)
| Semi-Passive (S) | Active-Enhanced (SE) | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Strategy | 12M | vs Bench | p.a. SI | vs Bench SI | Strategy | 12M | vs Bench | p.a. SI | vs Bench SI | |
| LCI Yield CHF S | +4.4% | -0.1% | +3.7% | +1.2% | LCI Yield CHF SE | +4.8% | +0.3% | +4.6% | +2.1% | |
| LCI Balanced CHF S | +9.8% | +3.6% | +5.9% | +2.6% | LCI Balanced CHF SE | +9.1% | +3.0% | +6.4% | +3.2% | |
| LCI Growth CHF S | +15.4% | +3.6% | +8.1% | +2.9% | LCI Growth CHF SE | +13.6% | +1.7% | +8.3% | +3.1% | |
| LCI Yield EUR S | +6.9% | +1.7% | +4.3% | +1.2% | LCI Yield EUR SE | +7.9% | +2.6% | +5.2% | +2.1% | |
| LCI Balanced EUR S | +13.2% | +5.2% | +6.6% | +2.6% | LCI Balanced EUR SE | +12.9% | +4.9% | +7.1% | +3.1% | |
| LCI Growth EUR S | +19.7% | +7.4% | +8.9% | +3.1% | LCI Growth EUR SE | +18.0% | +5.8% | +9.0% | +3.2% | |
| LCI Yield USD S | +4.1% | -1.1% | +6.4% | +1.1% | LCI Yield USD SE | +4.6% | -0.6% | +7.1% | +1.8% | |
| LCI Balanced USD S | +8.8% | +2.9% | +8.6% | +2.4% | LCI Balanced USD SE | +8.4% | +2.5% | +8.9% | +2.8% | |
| LCI Growth USD S | +13.7% | +2.7% | +10.7% | +2.3% | LCI Growth USD SE | +12.3% | +1.3% | +10.7% | +2.3% | |
Returns in reference currency; SI = since inception (annualised). Positive figures in green, negative in red. Source: La Côte Invest.
Since-Inception Cushions
Annualised since-inception returns span +3.7% p.a. (LCI Yield CHF S) to +10.7% p.a. (LCI Growth USD S). Versus benchmark since inception, the range runs from +1.1% p.a. (LCI Yield USD S) to +3.2% p.a. (LCI Growth EUR SE). The SE (active-enhanced) sleeves sit ahead of their S counterparts on a since-inception basis across every currency and risk profile, the cushion built largely in the Yield and Balanced families where active selection and the alternatives sleeve added the most relative value.
Best and Worst Contributors
(Sub-asset-class level, direction averaged across strategies; contribution varies widely by sleeve.)
Best contributors: developed-market equity carried every sleeve — North American equity was the single largest contributor across the board, with Eurozone, Swiss and the other developed-market blocks adding on top. In the SE sleeves the alternatives cushion (private equity and real estate) was an additional net-positive.
Worst contributors: the bond core was the year’s drag — government bonds and investment-grade corporates detracted as yields rose — alongside the small Latin American equity sleeve; gold also detracted in the franc and dollar sleeves while helping in euro terms.
Best and Worst Performers
Security level, 12M compounded return in each strategy’s reference currency. Expired/matured products and zero-weight lines excluded; no security breached the -35% bad-print guard.
Best performers: the US large-cap and North American trackers led across the board — e.g. iShares Core S&P 500 (+38.7% in EUR sleeves, +28.4% in USD), Xtrackers MSCI USA (+36.8% EUR), and iShares MSCI Canada (+35.8% EUR). India and Swiss equity trackers were also top-quartile.
Worst performers: iShares MSCI Brazil was the weakest holding everywhere (-17.8% in USD sleeves, -14.9% in CHF), followed by MSCI Korea and the longer-duration USD/EUR government bond trackers, which fell as rates rose.
FX Impact
Currency was a material driver in 2021 and worked in opposite directions by base currency:
EUR strategies: clearly positive (roughly +2.3% to +3.8%). A weaker euro turned unhedged USD exposure into a strong tailwind — the USD leg alone added ~+2.8% to +3.5%.
CHF strategies: mildly positive (roughly +0.1% to +0.5%). USD strength offset modest EUR and JPY weakness against the franc.
USD strategies: a headwind (roughly -0.6% to -2.1%). With the dollar strong, unhedged EUR and JPY holdings translated back into fewer dollars.
Portfolio Changes
None. The strategic sub-asset-class allocation was held constant across all 18 strategies for the full 12 months of 2021 — January weights equalled December weights in every sleeve. All performance dispersion came from market returns and currency, not from rotation.
Editorial Note
2021 rewarded a static, equity-heavy stance: holding the US and developed-market overweight through the year captured the full rally, while the defensive bond core was the year’s main relative cost as yields rose. The SE sleeves’ alternatives allocation (private equity, real estate, gold) added diversification, though gold detracted in franc and dollar terms. The clearest lesson of the year is how much outcome depended on base currency — identical portfolios delivered materially different net returns once FX was accounted for.
