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Investment Strategies

Blackforts Investment Approach

For investors who want to benefit from a professional, actively managed and duly monitored investment process, we offer our Investment Management mandates. Our clients can hereby choose from a range of strategies based on their personal preferences, market views and risk affinities.

Asset Management requires a professional approach, experience in financial industry, deep market knowledge, understanding of financial products and a profound research base.

Delegating Asset Management to Blackfort allows you to invest your valuable time in your core business activity, while ensuring a high investment efficiency and security for your bankable assets.

We deal with financial markets and monitor relevant business events on a daily basis. The access to the best in class analytics, a real time market coverage and the highest asset management level of our trading team, allows us to react rapidly to any market event, consequently deriving the optimal  trading ideas, depending on clients’ investment profile.

We report to you according to your wish with respect to detail and frequency.


Our Investment Philosophy is based on three main pillars: Geographical Diversification, Sector Weighting and Currency Allocation

International Diversification

We control long-term risks through Geopolitical diversification.

Sector Weighting

We base our sector weighting on fundamental market assessment.

Currency Allocation

We base our currency allocation on fundamental analysis of economic conditions.


Once we have defined an investment strategy according to your preferences, we build your portfolio by allocating your funds across different asset classes and choosing the best products within each asset class. We continuously monitor and rebalance your portfolio making use of short-term market opportunities as well as considering long-term market trend. Reporting periodicity and structure is performed at your convenience.

Defining an Investment Strategy is a complex task that requires a careful consideration of both, rational and behavioural factors.

We duly evaluate our clients’ investment goals, investment horizon, risk attitudes, liquidity requirements and currency preferences.

We pay respect to personal considerations such as family circumstances, income situation and specific wishes of our clients.

Capital Protection

Capital Protection
  • Liquidity
  • Bonds
  • Equities

Value Creation

Value Creation
  • Liquidity
  • Bonds
  • Equities
  • Als* (Alternative Investments)

Capital Growth

Capital Growth
  • Liquidity
  • Bonds
  • Equities
  • Als

Selection of suitable investment products, is based on three milestones: geographical diversification, macroeconomic trends and fundamental factors.

Geographical Diversification: We reduce risks by investing in geographically diversified financial products.

Macroeconomic Trends: We perform a fundamental analysis of the economic environment and market conditions, assess geopolitical risks, and select investment products in line with our market projection.

Fundamental Factors: We conduct a thorough industry and sector analysis, and evaluate credit ratings, liquidity positions, as well as finacial and operational health of individual companies.

As a result of a careful consideration of all these factors, your Portfolio Manager selects best shares, fixed income securities, mutual funds and ETFs for your portfolio.

Under normal market conditions we ensure that your portfolio generates a solid return, while at times of market fluctuations we limit your risks and losses.

We review the strategy with you to make sure that it still corresponds to your preferences and personal situation, and adopt it accordingly.

We closely follow market developments making use of short-term market opportunities and long-term market trends to optimize your portfolio.

We prepare regular, clear and transparent reports on the performance of your portfolio, fullfil any ad-hoc queries and provide you our exclusive investment recommendations.

Blackfort Investment Strategies

Main Strategy Characteristics

Risk tolerance: low – moderate
Expected return: 3-6%
Investment horizon: 2-5 years

Key Investment Benefits:

  • Low volatility
  • Stable and regular returns (coupon payments)
  • Stable growth and moderate capital gains
  • Relatively liquid asset classes

Indicative bandwidth:

Liquidity: 0-20%
Bonds: 80-100%

Asset Allocation

Asset mix is consistent of liquid investments and fixed income instruments, aknowledging your investment horizon and currency preferences.

  • Liquidity
  • Bonds
Investment Products

Liquidity:

  • Cash
  • Cash positions are liquidity investments held in a refernce currency on the deposit account.

    Cash holdings offer investors flexibility as they are available at short notice. However, in the current negative interest rate environment we prefer to avoid large cash positions.

    The choice of reference currency is one of the most important factors determining the future performance of your investment strategy. Reference currency highly influences the general structure and fluctuations of the portfolio. In our discretionary mandates we predominantly invest in USD, EUR, CHF, GBP and RUB.

  • Money Market Instruments
  • Money Market Instruments are short-term (maturity up to one year) investments with a pre-determined interest rate, which can be easily converted back to cash. There are two main types of Money Market Instruments:

    • Call deposits do not have a specified maturity and can be «called» at a short notice.
    • Fixed-term deposits have a set term and cannot be reinvested before maturity.

    Money Market Instruments are flexible, liquid and safe investments, that can be easily converted into cash if needed.

    We allocate our clients’ funds into Money Market Instruments to obtain short-term funding or if we want to ensure a safe short-term investment. For instance, if we need to add liquidity to a portfolio without risk, we invest clients’ money into Treasury Bills.

Bonds:

  • Government Bonds
  • Government bonds are debt securities issued by a sovereign state, and are traditionally categorized as low risk investments as they are guaranteed by the issuing government.

    In recent years, we have seen that sovereign debt may be subject to high default risk (e.g. Greece, Ireland and Portugal).

    We closely monitor the macroeconomic developments around the globe in general and the microeconomic environment of individual countries in particular in order to offer our clients the most secure investment and to protect them from unforseen risk exposure.

  • Corporate Bonds
  • Corporate bonds are bonds issued by companies generally in order to finance their growth or for refinancing purposes. The credit quality of these bonds is linked to the financial health of the issuing companies and their operating environement:

    The companies with low credit risk are usually rated as Investment Grade, with an investment rating above BBB.

    The companies with high credit risk are usually rated as High Yield, with an investment rating below BBB.

    At times of negative interest rates, when cash investments lag other investments we consider short-dated investment grade bonds to be a good alternative to liquidity investments.

    In order to select best in class corporate bonds we constantly conduct a thorough industry and sector analysis, and evaluate credit ratings, liquidity positions, as well as finacial and operational health of individual companies.

    We provide weekly bond recommendations to our clients picking the best products based on our thorough research.

  • Emerging Markets Bonds
  • Emerging market bonds are bonds issued by governments and companies in emerging markets, and are considered to be of a generally higher risk nature due to their exposure towards unstable geoplotical and economical conditions.

    In recent years, we invested heavily in EMMA bonds due to their raising credit quality, higher yields and ever improving macroeconomic conditions in their relevant countries.

    Due to their nature, an EMMA bond investment can be subject to strong price volatility, illiquidity or even default event.

    Therefore we constantly analyse current geopolitical conditions and their future trends in relevant countries, what is of crucial importance in order to conduct a succesfull EMMA bond investment.

  • Inflation-linked Bonds
  • Inflation-Linked bonds offer additional protection at times of high inflation.

    Rising inflation puts pressure on fixed income investments causing thier prices to increase and yields to fall. On the contary, interest rate of inflation-linked products rise with increasing inflation.

    At current market condition, we do hold Inflation-Liked bonds in our portfolios in order to protect our clients’ investment from potentially rising interest rates in the United States.

    Inflation-Linked Bonds do only offer an interesting investment opportunity if bought at the right time und in the relevant currency.

    Consequently, we carefully examine interest level development in their macroeconomical context across countries and currencies, in order to conduct perfectly timed trade decisions on inflation-linked bond instruments.

  • Bond Funds
  • Bond Funds invest into many different bond securities based on a particular investment strategy (e.g. duration, sector). As result bond funds may largely contribute to a portfolio offering in two ways:

    By lowering the overal risk exposure trough the provision of investment opportuinity in a large number of single bonds even with a relatively small absolute investment size.

    Or trough the implementation of a succesfull trading strategy, which allows to relatively outperform the relevant Bond market.

    We select only the best in class bond funds focusing on their risk characteristics, underlying investment strategies and their relative performance. We maintain a close professional relationship with fund managers and closely monitor their trading decisions and consequent investment results.

    At the same time we actively search for the new fund investment opportunities and regularly organize beauty contests, in order to select the best in class bond funds for our clients.

     

Main Strategy Characteristics

Risk tolerance: moderate – high
Expected return: 5-8%
Investment horizon: 3-7 years

Key Investment Benefits:

  • Regular returns (interest and dividend payments)
  • Capital gains
  • Long-term potential through exposure to companies’ growth
  • Relatively liquid asset classes

Indicative bandwidth:

Liquidity: 0-20%
Bonds: 50-80%
Equity: 30-50%

Asset Allocation

Asset mix is consistent of liquid investments, fixed income instruments and equities, aknowledging your investment horizon and currency preferences.

  • Liquidity
  • Bonds
  • Equities
Investment Products

Liquidity:

  • Cash
  • Cash positions are liquidity investments held in a refernce currency on the deposit account.

    Cash holdings offer investors flexibility as they are available at short notice. However, in the current negative interest rate environment we prefer to avoid large cash positions.

    The choice of reference currency is one of the most important factors determining the future performance of your investment strategy. Reference currency highly influences the general structure and fluctuations of the portfolio. In our discretionary mandates we predominantly invest in USD, EUR, CHF, GBP and RUB.

  • Money Market Instruments
  • Money Market Instruments are short-term (maturity up to one year) investments with a pre-determined interest rate, which can be easily converted back to cash. There are two main types of Money Market Instruments:

    • Call deposits do not have a specified maturity and can be «called» at a short notice.
    • Fixed-term deposits have a set term and cannot be reinvested before maturity.

    Money Market Instruments are flexible, liquid and safe investments, that can be easily converted into cash if needed.

    We allocate our clients’ funds into Money Market Instruments to obtain short-term funding or if we want to ensure a safe short-term investment. For instance, if we need to add liquidity to a portfolio without risk, we invest clients’ money into Treasury Bills.

Bonds:

  • Government Bonds
  • Government bonds are debt securities issued by a sovereign state, and are traditionally categorized as low risk investments as they are guaranteed by the issuing government.

    In recent years, we have seen that sovereign debt may be subject to high default risk (e.g. Greece, Ireland and Portugal).

    We closely monitor the macroeconomic developments around the globe in general and the microeconomic environment of individual countries in particular in order to offer our clients the most secure investment and to protect them from unforseen risk exposure.

  • Corporate Bonds
  • Corporate bonds are bonds issued by companies generally in order to finance their growth or for refinancing purposes. The credit quality of these bonds is linked to the financial health of the issuing companies and their operating environement:

    The companies with low credit risk are usually rated as Investment Grade, with an investment rating above BBB.

    The companies with high credit risk are usually rated as High Yield, with an investment rating below BBB.

    At times of negative interest rates, when cash investments lag other investments we consider short-dated investment grade bonds to be a good alternative to liquidity investments.

    In order to select best in class corporate bonds we constantly conduct a thorough industry and sector analysis, and evaluate credit ratings, liquidity positions, as well as finacial and operational health of individual companies.

    We provide weekly bond recommendations to our clients picking the best products based on our thorough research.

  • Emerging Markets Bonds
  • Emerging market bonds are bonds issued by governments and companies in emerging markets, and are considered to be of a generally higher risk nature due to their exposure towards unstable geoplotical and economical conditions.

    In recent years, we invested heavily in EMMA bonds due to their raising credit quality, higher yields and ever improving macroeconomic conditions in their relevant countries.

    Due to their nature, an EMMA bond investment can be subject to strong price volatility, illiquidity or even default event.

    Therefore we constantly analyse current geopolitical conditions and their future trends in relevant countries, what is of crucial importance in order to conduct a succesfull EMMA bond investment.

  • Inflation-linked Bonds
  • Inflation-Linked bonds offer additional protection at times of high inflation.

    Rising inflation puts pressure on fixed income investments causing thier prices to increase and yields to fall. On the contary, interest rate of inflation-linked products rise with increasing inflation.

    At current market condition, we do hold Inflation-Liked bonds in our portfolios in order to protect our clients’ investment from potentially rising interest rates in the United States.

    Inflation-Linked Bonds do only offer an interesting investment opportunity if bought at the right time und in the relevant currency.

    Consequently, we carefully examine interest level development in their macroeconomical context across countries and currencies, in order to conduct perfectly timed trade decisions on inflation-linked bond instruments.

  • Bond Funds
  • Bond Funds invest into many different bond securities based on a particular investment strategy (e.g. duration, sector). As result bond funds may largely contribute to a portfolio offering in two ways:

    By lowering the overal risk exposure trough the provision of investment opportuinity in a large number of single bonds even with a relatively small absolute investment size.

    Or trough the implementation of a succesfull trading strategy, which allows to relatively outperform the relevant Bond market.

    We select only the best in class bond funds focusing on their risk characteristics, underlying investment strategies and their relative performance. We maintain a close professional relationship with fund managers and closely monitor their trading decisions and consequent investment results.

    At the same time we actively search for the new fund investment opportunities and regularly organize beauty contests, in order to select the best in class bond funds for our clients.

     

  • Convertible Bonds
  • Convertible Bonds with their fixed term and interest rate give investors the right to convert the bond into equity during the conversion period.

    These bonds have exposure to both, equity and bond markets and behave equity alike in a rising market and similar to debt instruments in declining market.

    Historically, convertible bonds show good performace in the market characterized by negative government bonds rates and increasing interest rates.

    These products are very attractive due to their structure and valuation, and are a valuable part of our value creation mandates in an increasing interest rate environment.

    Nevertheless, the conversion of a debt instrument in an equity product, while the underlying company faces serious macroeconomical or fundamental problems, bears a significant risk.  A careful selection of convertible bonds is therefore inalienable in order to preserve the investor form unexpected losses.

Equity:

  • Single Equities
  • Single Equities give an investor a share in a stock company. Shareholders participate in the development of a share price, usually get dividend income and may sell their shares in a regulated stock exchange

    Investments in single equities give investors an opportunity to participate in the long-term economic development of a certain company, benefit from capital gains and dividend income. However equities are characterized by a high volatility.

    In order to select best in class equities we closely follow the general market situation, stock market conditions, and company fundamentals. We focus our investments on blue chips.

  • ETFs
  • ETFs are generally passive investments replicating the development of a particular market index, commodity,  sector, country or foreign exchange, and are traded as single equities.

    The most traditional type of an ETF is an index-based ETF.

    ETFs are very popular investment assets due to their high transparency, liquidity and accessibility to small investors. They have lower management costs and often outperform actively managed funds.

    Interestingly, the high liquidity of ETFs can also become a risk for an investor as ETFs have no short-selling constraints. In case of a negative market event, they can be sold short while the underlying fund may not have enough liquidity to satisfy the orders.

    Therefore, we accurately select ETFs based on their characteristics, including among others past performance, trading activity and management fees.

  • Equity Funds
  • Equity Funds invest into a basket of stocks based on a particular investment strategy (country, sector etc.). As a result equity funds may largely contribute to a portfolio offering in two ways:

    By lowering the overal risk exposure through the provision of investment opportuinity in a large number of single equities even with a relatively small absolute investment size.

    Or trough the implementation of a succesfull trading strategy, which allows to relatively outperform the relevant equity market

    We select only the best in class equity funds focusing on their risk characteristics, underlying investment strategies and their relative performance. We maintain a close professional relationship with fund managers and closely monitor their trading decisions and consequent investment results.

    At the same time we actively search for the new fund investment opportunities and regularly organize beauty contests, in order to select the best in class equity funds for our clients.

Main Strategy Characteristics

Risk tolerance: high
Expected return: 6-12%
Investment horizon: > 5 years

Key Investment Benefits:

  • Regular returns (interest and dividend payments)
  • Additional returns provided by AIs
  • Capital gains
  • Diversification (low correlation of AIs with the market and other financial instruments)
  • Long-term potential

Indicative bandwidth:

Liquidity: 0-20%
Bonds: 20-50%
Equity: 50-70%
Alternative Investments (AIs): 0-30%

Asset Allocation

Asset mix is consistent of liquid investments, fixed income instruments, equities and alternative investments, aknowledging your investment horizon and currency preferences

  • Liquidity
  • Bonds
  • Equities
  • Als
Investment Products

Liquidity:

  • Cash
  • Cash positions are liquidity investments held in a refernce currency on the deposit account.

    Cash holdings offer investors flexibility as they are available at short notice. However, in the current negative interest rate environment we prefer to avoid large cash positions.

    The choice of reference currency is one of the most important factors determining the future performance of your investment strategy. Reference currency highly influences the general structure and fluctuations of the portfolio. In our discretionary mandates we predominantly invest in USD, EUR, CHF, GBP and RUB.

  • Money Market Instruments
  • Money Market Instruments are short-term (maturity up to one year) investments with a pre-determined interest rate, which can be easily converted back to cash. There are two main types of Money Market Instruments:

    • Call deposits do not have a specified maturity and can be «called» at a short notice.
    • Fixed-term deposits have a set term and cannot be reinvested before maturity.

    Money Market Instruments are flexible, liquid and safe investments, that can be easily converted into cash if needed.

    We allocate our clients’ funds into Money Market Instruments to obtain short-term funding or if we want to ensure a safe short-term investment. For instance, if we need to add liquidity to a portfolio without risk, we invest clients’ money into Treasury Bills.

Bonds:

  • Government Bonds
  • Government bonds are debt securities issued by a sovereign state, and are traditionally categorized as low risk investments as they are guaranteed by the issuing government.

    In recent years, we have seen that sovereign debt may be subject to high default risk (e.g. Greece, Ireland and Portugal).

    We closely monitor the macroeconomic developments around the globe in general and the microeconomic environment of individual countries in particular in order to offer our clients the most secure investment and to protect them from unforseen risk exposure.

  • Corporate Bonds
  • Corporate bonds are bonds issued by companies generally in order to finance their growth or for refinancing purposes. The credit quality of these bonds is linked to the financial health of the issuing companies and their operating environement:

    The companies with low credit risk are usually rated as Investment Grade, with an investment rating above BBB.

    The companies with high credit risk are usually rated as High Yield, with an investment rating below BBB.

    At times of negative interest rates, when cash investments lag other investments we consider short-dated investment grade bonds to be a good alternative to liquidity investments.

    In order to select best in class corporate bonds we constantly conduct a thorough industry and sector analysis, and evaluate credit ratings, liquidity positions, as well as finacial and operational health of individual companies.

    We provide weekly bond recommendations to our clients picking the best products based on our thorough research.

  • Emerging Markets Bonds
  • Emerging market bonds are bonds issued by governments and companies in emerging markets, and are considered to be of a generally higher risk nature due to their exposure towards unstable geoplotical and economical conditions.

    In recent years, we invested heavily in EMMA bonds due to their raising credit quality, higher yields and ever improving macroeconomic conditions in their relevant countries.

    Due to their nature, an EMMA bond investment can be subject to strong price volatility, illiquidity or even default event.

    Therefore we constantly analyse current geopolitical conditions and their future trends in relevant countries, what is of crucial importance in order to conduct a succesfull EMMA bond investment.

  • Inflation-linked Bonds
  • Inflation-Linked bonds offer additional protection at times of high inflation.

    Rising inflation puts pressure on fixed income investments causing thier prices to increase and yields to fall. On the contary, interest rate of inflation-linked products rise with increasing inflation.

    At current market condition, we do hold Inflation-Liked bonds in our portfolios in order to protect our clients’ investment from potentially rising interest rates in the United States.

    Inflation-Linked Bonds do only offer an interesting investment opportunity if bought at the right time und in the relevant currency.

    Consequently, we carefully examine interest level development in their macroeconomical context across countries and currencies, in order to conduct perfectly timed trade decisions on inflation-linked bond instruments.

  • Bond Funds
  • Bond Funds invest into many different bond securities based on a particular investment strategy (e.g. duration, sector). As result bond funds may largely contribute to a portfolio offering in two ways:

    By lowering the overal risk exposure trough the provision of investment opportuinity in a large number of single bonds even with a relatively small absolute investment size.

    Or trough the implementation of a succesfull trading strategy, which allows to relatively outperform the relevant Bond market.

    We select only the best in class bond funds focusing on their risk characteristics, underlying investment strategies and their relative performance. We maintain a close professional relationship with fund managers and closely monitor their trading decisions and consequent investment results.

    At the same time we actively search for the new fund investment opportunities and regularly organize beauty contests, in order to select the best in class bond funds for our clients.

     

  • Convertible Bonds
  • Convertible Bonds with their fixed term and interest rate give investors the right to convert the bond into equity during the conversion period.

    These bonds have exposure to both, equity and bond markets and behave equity alike in a rising market and similar to debt instruments in declining market.

    Historically, convertible bonds show good performace in the market characterized by negative government bonds rates and increasing interest rates.

    These products are very attractive due to their structure and valuation, and are a valuable part of our value creation mandates in an increasing interest rate environment.

    Nevertheless, the conversion of a debt instrument in an equity product, while the underlying company faces serious macroeconomical or fundamental problems, bears a significant risk.  A careful selection of convertible bonds is therefore inalienable in order to preserve the investor form unexpected losses.

Equity:

  • Single Equities
  • Single Equities give an investor a share in a stock company. Shareholders participate in the development of a share price, usually get dividend income and may sell their shares in a regulated stock exchange

    Investments in single equities give investors an opportunity to participate in the long-term economic development of a certain company, benefit from capital gains and dividend income. However equities are characterized by a high volatility.

    In order to select best in class equities we closely follow the general market situation, stock market conditions, and company fundamentals. We focus our investments on blue chips.

  • ETFs
  • ETFs are generally passive investments replicating the development of a particular market index, commodity,  sector, country or foreign exchange, and are traded as single equities.

    The most traditional type of an ETF is an index-based ETF.

    ETFs are very popular investment assets due to their high transparency, liquidity and accessibility to small investors. They have lower management costs and often outperform actively managed funds.

    Interestingly, the high liquidity of ETFs can also become a risk for an investor as ETFs have no short-selling constraints. In case of a negative market event, they can be sold short while the underlying fund may not have enough liquidity to satisfy the orders.

    Therefore, we accurately select ETFs based on their characteristics, including among others past performance, trading activity and management fees.

  • Equity Funds
  • Equity Funds invest into a basket of stocks based on a particular investment strategy (country, sector etc.). As a result equity funds may largely contribute to a portfolio offering in two ways:

    By lowering the overal risk exposure through the provision of investment opportuinity in a large number of single equities even with a relatively small absolute investment size.

    Or trough the implementation of a succesfull trading strategy, which allows to relatively outperform the relevant equity market

    We select only the best in class equity funds focusing on their risk characteristics, underlying investment strategies and their relative performance. We maintain a close professional relationship with fund managers and closely monitor their trading decisions and consequent investment results.

    At the same time we actively search for the new fund investment opportunities and regularly organize beauty contests, in order to select the best in class equity funds for our clients.

Alternative Investments:

  • Commodities
  • Commodities are physical goods produced by the mining industry, so-called hard commodities (e.g. oil & gas, gold and other precious metals, industrial metals), or agricultural industry, so-called soft commodities (e.g. corn, coffee, cotton).

    Investmetnts in commodities can be made either physically or through commodity derivatives.

    Investment in commodities are attractive for investors seeking additional returns or willing to diversify their portfolios as their prices are determined by supply and demand conditions rather that the general market. Moreover, in the market environment with increasing inflation, commodites, especially gold, may offer a good hedge.

    Nevertheless, commodity investment also bear significant risks, as their prices can be extremely volatile. Consequently, we carefully evaluate all factors that can potentially affect the price of a certain commodity, e.g. government regulations, economic conditions, trade politics.

  • ILS/Cat-Bonds
  • ILS are products linked to any type of insurance events, e.g. natural catastrophic events, terrorist attacks, aviation risks. Cat bonds are a sub-category of ILS which expose investors to risks of natural events.

    ILS bonds are exposed to larger potential losses than other asset classes, but the probability of such losses is very low. 

    Cat Bonds have almost no correlation with the financial market, are not influenced by economic or geopolitical situatian as they are linked to natural catastrophic events thereby highly contributing to a portfolio in terms of diversification.

    We generally consider Cat bonds across North America, Europe and Asia and hold these assets to ensure a well-balances return-risk profile of our portfolios.

  • Real Estate
  • Real Estate in this context means indirect investments in real estate related products, such as real estate investment trusts. REITs are companies that own and operate real estate that generates income, e.g. rental payments.

    Indirect real estate investments are less costly and more liquid than direct real estate investments.

    Investments in real estate are attractive for investors seeking additional returns (rental payments) or willing to diversify their portfolios based on the low correlation with the general market.

    In past years REITs have been one of the fastest growing investments with investors looking for return in a low interest rate environment. Recently, REITs have been even recognized as an independent economic sector.

    Nevertheless, investments in REITs are rather speculative, and we hold them as a small part of our portfolios.

  • Hedge Fund
  • Hedge Fund can be any type of investment fund that agressivly invests fund’s assets through derivative strategies.

    Hedge funds are only open to qualified investors.

    Investments in Hedge Funds may generate above-average returtns for investors willing to take a significant amount of risk. They also contribute to diversification and provide access to new market opportunities.

    Hedge Funds often use leverage to increase their returns which caused a huge damage during the 2008 financial crisis.

    As Hedge Funds lack regulation and are rather intransparent, we only invest in hedge funds resulting from our network. We maintain a close professional relationship with fund managers and closely monitor their trading decisions and consequent investment results.

Main Strategy Characteristics

Risk tolerance: low – high
Expected return: 1 – 25%
Investment horizon: 1 – 20 years

Key Investment Benefits:

  • Individual asset mix
  • Dependent on client’s request the Investment strategy can be both, either very agressive or very defensive
  • A customized selection of investment products will be choosen in line with customer preferences
  • Investments can be arranged in a way which guarantees regular revenue based cash flows (coupon payments) on a monthly or quarterly basis
  • Duration, liquidity and voaltiliy of investment instruments can be adjusted as per clients wishes.

Indicative bandwidth:

Liquidity: 0-100%
Bonds: 0-100%
Equity: 1-100%
Alternative Investments (AIs): 0-100%

Asset Allocation

Asset mix is consistent of liquid investments and fixed income instruments, aknowledging your investment horizon and currency preferences.

  • Liquidity
  • Bonds
  • Equities
  • Equities 2
Investment Products

Liquidity:

  • Cash
  • Cash positions are liquidity investments held in a refernce currency on the deposit account.

    Cash holdings offer investors flexibility as they are available at short notice. However, in the current negative interest rate environment we prefer to avoid large cash positions.

    The choice of reference currency is one of the most important factors determining the future performance of your investment strategy. Reference currency highly influences the general structure and fluctuations of the portfolio. In our discretionary mandates we predominantly invest in USD, EUR, CHF, GBP and RUB.

  • Money Market Instruments
  • Money Market Instruments are short-term (maturity up to one year) investments with a pre-determined interest rate, which can be easily converted back to cash. There are two main types of Money Market Instruments:

    • Call deposits do not have a specified maturity and can be «called» at a short notice.
    • Fixed-term deposits have a set term and cannot be reinvested before maturity.

    Money Market Instruments are flexible, liquid and safe investments, that can be easily converted into cash if needed.

    We allocate our clients’ funds into Money Market Instruments to obtain short-term funding or if we want to ensure a safe short-term investment. For instance, if we need to add liquidity to a portfolio without risk, we invest clients’ money into Treasury Bills.

Bonds:

  • Government Bonds
  • Government bonds are debt securities issued by a sovereign state, and are traditionally categorized as low risk investments as they are guaranteed by the issuing government.

    In recent years, we have seen that sovereign debt may be subject to high default risk (e.g. Greece, Ireland and Portugal).

    We closely monitor the macroeconomic developments around the globe in general and the microeconomic environment of individual countries in particular in order to offer our clients the most secure investment and to protect them from unforseen risk exposure.

  • Corporate Bonds
  • Corporate bonds are bonds issued by companies generally in order to finance their growth or for refinancing purposes. The credit quality of these bonds is linked to the financial health of the issuing companies and their operating environement:

    The companies with low credit risk are usually rated as Investment Grade, with an investment rating above BBB.

    The companies with high credit risk are usually rated as High Yield, with an investment rating below BBB.

    At times of negative interest rates, when cash investments lag other investments we consider short-dated investment grade bonds to be a good alternative to liquidity investments.

    In order to select best in class corporate bonds we constantly conduct a thorough industry and sector analysis, and evaluate credit ratings, liquidity positions, as well as finacial and operational health of individual companies.

    We provide weekly bond recommendations to our clients picking the best products based on our thorough research.

  • Emerging Markets Bonds
  • Emerging market bonds are bonds issued by governments and companies in emerging markets, and are considered to be of a generally higher risk nature due to their exposure towards unstable geoplotical and economical conditions.

    In recent years, we invested heavily in EMMA bonds due to their raising credit quality, higher yields and ever improving macroeconomic conditions in their relevant countries.

    Due to their nature, an EMMA bond investment can be subject to strong price volatility, illiquidity or even default event.

    Therefore we constantly analyse current geopolitical conditions and their future trends in relevant countries, what is of crucial importance in order to conduct a succesfull EMMA bond investment.

  • Inflation-linked Bonds
  • Inflation-Linked bonds offer additional protection at times of high inflation.

    Rising inflation puts pressure on fixed income investments causing thier prices to increase and yields to fall. On the contary, interest rate of inflation-linked products rise with increasing inflation.

    At current market condition, we do hold Inflation-Liked bonds in our portfolios in order to protect our clients’ investment from potentially rising interest rates in the United States.

    Inflation-Linked Bonds do only offer an interesting investment opportunity if bought at the right time und in the relevant currency.

    Consequently, we carefully examine interest level development in their macroeconomical context across countries and currencies, in order to conduct perfectly timed trade decisions on inflation-linked bond instruments.

  • Bond Funds
  • Bond Funds invest into many different bond securities based on a particular investment strategy (e.g. duration, sector). As result bond funds may largely contribute to a portfolio offering in two ways:

    By lowering the overal risk exposure trough the provision of investment opportuinity in a large number of single bonds even with a relatively small absolute investment size.

    Or trough the implementation of a succesfull trading strategy, which allows to relatively outperform the relevant Bond market.

    We select only the best in class bond funds focusing on their risk characteristics, underlying investment strategies and their relative performance. We maintain a close professional relationship with fund managers and closely monitor their trading decisions and consequent investment results.

    At the same time we actively search for the new fund investment opportunities and regularly organize beauty contests, in order to select the best in class bond funds for our clients.

     

  • Convertible Bonds
  • Convertible Bonds with their fixed term and interest rate give investors the right to convert the bond into equity during the conversion period.

    These bonds have exposure to both, equity and bond markets and behave equity alike in a rising market and similar to debt instruments in declining market.

    Historically, convertible bonds show good performace in the market characterized by negative government bonds rates and increasing interest rates.

    These products are very attractive due to their structure and valuation, and are a valuable part of our value creation mandates in an increasing interest rate environment.

    Nevertheless, the conversion of a debt instrument in an equity product, while the underlying company faces serious macroeconomical or fundamental problems, bears a significant risk.  A careful selection of convertible bonds is therefore inalienable in order to preserve the investor form unexpected losses.

Equity:

  • Single Equities
  • Single Equities give an investor a share in a stock company. Shareholders participate in the development of a share price, usually get dividend income and may sell their shares in a regulated stock exchange

    Investments in single equities give investors an opportunity to participate in the long-term economic development of a certain company, benefit from capital gains and dividend income. However equities are characterized by a high volatility.

    In order to select best in class equities we closely follow the general market situation, stock market conditions, and company fundamentals. We focus our investments on blue chips.

  • ETFs
  • ETFs are generally passive investments replicating the development of a particular market index, commodity,  sector, country or foreign exchange, and are traded as single equities.

    The most traditional type of an ETF is an index-based ETF.

    ETFs are very popular investment assets due to their high transparency, liquidity and accessibility to small investors. They have lower management costs and often outperform actively managed funds.

    Interestingly, the high liquidity of ETFs can also become a risk for an investor as ETFs have no short-selling constraints. In case of a negative market event, they can be sold short while the underlying fund may not have enough liquidity to satisfy the orders.

    Therefore, we accurately select ETFs based on their characteristics, including among others past performance, trading activity and management fees.

  • Equity Funds
  • Equity Funds invest into a basket of stocks based on a particular investment strategy (country, sector etc.). As a result equity funds may largely contribute to a portfolio offering in two ways:

    By lowering the overal risk exposure through the provision of investment opportuinity in a large number of single equities even with a relatively small absolute investment size.

    Or trough the implementation of a succesfull trading strategy, which allows to relatively outperform the relevant equity market

    We select only the best in class equity funds focusing on their risk characteristics, underlying investment strategies and their relative performance. We maintain a close professional relationship with fund managers and closely monitor their trading decisions and consequent investment results.

    At the same time we actively search for the new fund investment opportunities and regularly organize beauty contests, in order to select the best in class equity funds for our clients.

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