We assume that the markets for liquid investments will be efficient. We therefore do not engage in proactive trading based on price forecasts; this would only cause unnecessary costs for your portfolio management. In our view, research as a "forecast supplier" is enormously overestimated. The short-term pursuit of alpha is not conducive. On the other hand, we are convinced that in the long-term an optimal and balanced asset structure and a focus on quality are crucial. Consequently, we pursue an active quality and risk management based on our analysis. It is important to us, for example, to avoid cluster or concentration risks at stock or sector level, which can arise in standard market indices. We also aim to exclude chronically unprofitable and unsustainable sub-sectors. If robust and resilient portfolios are managed in this way, there is an active element in the sense that the portfolios have a more balanced composition than a common, capitalization-weighted index. In the case of bonds in particular, the common weighting logic based on market capitalization is absurd because the debt leaders make up the largest share of the portfolio.
The basis is a consistent rebalancing within the defined bandwidths: We ensure the anti-cyclical element at the investment category level in portfolio management for mixed mandates by setting ranges around the strategic equity ratio. We make additional purchases during a crisis, leave them running when the market recovers, and rebalance them if the increase in the market causes the equity ratio to deviate too far from the strategic value. In this way, the share ratio is reduced anti-cyclically towards the strategic value through profit-taking.
When building up a new portfolio, we advocate a gradual approach if you provide us with liquidity. Diversification on the time level is important to us, as there is no such thing as optimal timing. If comparability with other mandates is central to you (benchmarking), it is obviously possible to build up the portfolio immediately.