Investment expertise

Investment process

Our investment process is based on a continuous analysis of fundamentals on the one hand and on valuations on the other. At the heart of any active investment decision is the ongoing comparison of investment quality and investment price.

Active investment decisions revolve around the two main elements “interest rates” and “credit” and the definition of active interest rate and credit strategies. Interest rate and credit strategies are deliberately considered as separate investment decisions independent of each other. From an analytical point of view, interest rates are further subdivided into two components, the real interest rate and inflation, in order to be able to take appropriate investment decisions and formulate suitable interest rate strategies.

• Interest rate strategies: directional strategies (long, neutral, short duration), curve strategies, relative strategies between markets. Inflation-protected markets are an integral part of interest rate strategies and all strategies can refer to nominal, real or break-even inflation rates (where applicable).
• Credit strategies: Weighting (avoid, overweight, neutral, underweight), credit curve strategies.

We focus on the long-term strategic direction of the portfolio, while short-term timing usually only plays a minor role.

• All our analyses are based on proprietary research and tools that focus on relevant key elements. These key elements are identified, understood, quantified, tested, strictly monitored, challenged and continually refined.
• This focus guarantees a structured, systematic and disciplined investment process. Relevant information is always taken into account, while excess information, headlines, “stories” and “noise” are largely ignored. The investment process has been developed by our own fixed income team and is therefore implemented and supported by the whole team. Thus, the whole team speaks a common language that is constantly evolving and helps us with our day-to-day investment decisions and the implementation of the investment process. We see the continuous development of our proprietary research as one of our central tasks, in addition to the actual implementation of the investment process.
• In credit analysis in particular, proprietary research is complemented and backed up by the quantitative credit model “Credit Edge” from Moody’s Analytics.
• Proprietary research on fundamentals and valuations is at the heart of our investment process and helps us come up with new ideas. Research and portfolio management are closely linked and external research plays only a marginal role. We strongly believe that the inclusion of proprietary research in portfolio management has clear advantages:

  • Structured and standardised monitoring and analysis of the markets. Systematic, regular and comparable collection and analysis of relevant data from all markets in the investment universe. This standardisation and uniformity are crucial in order to be able to assess the markets in both absolute and relative terms and to be able to make appropriate investment decisions.
  • Identification of trends in fundamentals and/or valuations before the “market consensus”, i.e. before the trends are fully reflected in the market prices.
• To do this, we use data from national sources such as statistical offices, central banks and finance ministries, but also from supranational sources such as the IMF, OECD, BIS or Eurostat. The data is accessed directly or indirectly via Bloomberg. For credit analysis, we have access to the vast database of Moody’s Analytics.
• The main purpose of external research is to check the quality of the data and information available, to enrich the database if necessary or to challenge our ideas. Investment decisions are not based on bond ratings from external providers and research reports from external rating agencies are treated like any other external research.