This international total return allocation fund aims to create value based on the cost of assets through a reactive allocation process that utilises risk premiums.

The strategy applied in Groupama Risk Premium rests on the following observations:

• Changes in asset allocation are a necessity in portfolio management.

• For investors in the medium term, the necessary changes must factor in the level of the cost of assets.

• Risk premiums make it possible to grasp the cost of an asset: The risk premium reflects the existing gap between the expected return on an asset class and the return on a risk-free asset such as cash.

The risk premium approach offers a useful key to understanding; it allows the medium-term investor to better “read” and navigate market cycles, in particular by optimising risk-taking in the portfolio.

Groupama Risk Premium offers a genuine investment opportunity due to its ability to identify asset classes that offer the best potential for performance. Risk premiums are reaching extreme levels today—to wit, the historically high risk premiums for equities and, in contrast, the negative risk premiums on safe-haven asset classes (bund, U.S. Treasuries, yen).

Once the asset allocation is set by incorporating risk premiums and any shorter-term factors, the actual investment is made on highly liquid financial instruments such as futures contracts in order to take advantage of volatility by quickly adapting to changing economic and financial circumstances.

The fund managers, Olivier Davanne and Thierry Pujol, demonstrate with the strategy’s 5-year performance history that a reactive and dynamic allocation investment solution is able to generate, over the long term, a better performance than a traditional benchmarked solution.

Indeed, since its inception¹, Groupama Risk Premium has significantly outperformed all of the Lipper and Europerformance diversified indices:

Groupama Risk Premium represents an innovative and tailored investment solution for medium and long term investors seeking to optimise their risk taking.

¹ Net performance from 15/12/2006 to 31/10/ 2011 - handover of management to Groupama Asset Management on 30/09/11
Past performance is no guarantee of future results. Performance is not constant over time.