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Portfolio Management

We only invest in investments that you understand. These are cost-efficient, transparent and liquid direct investments. Our portfolio management is anti-cyclical, long-term and disciplined. After positive stock market phases, the proportion of equities is reduced towards the target ratio and increased accordingly in downturns. We do not engage in activist trading, as this would only cause unnecessary costs for you.
How is the equity component managed?
In terms of equities, we maintain a well-diversified and value-oriented portfolio of global sector leaders. These have proven that they can create sustainable value and navigate through crises. The companies come from Western countries that meet our minimum requirements in terms of corporate governance, property rights, sustainability reporting, stock market infrastructure and political stability. The equity portfolio is supplemented by a limited number of small and medium-sized Swiss companies traded on the stock exchange (small and mid caps). By tending towards an equal weighting (instead of a capitalization weighting) – i.e. all positions are of roughly the same size – we achieve a better risk diversification in equities and thus avoid concentration risks. We actively exclude chronically low-margin sectors and unsustainable stocks.
How is portfolio management for bonds carried out?
In the case of bonds, we invest primarily in your local currency and aim to have a portfolio of high-quality securities diversified in terms of borrower types. These are both corporate bonds and bonds issued by public-sector borrowers. Due to these quality and security aspects, we do not hold perpetual, subordinated or hybrid bonds and do not hold convertible bonds or "high yield bonds". Your risk budget should be covered in the long-term by the equity ratio, while the bonds should bring security and stability to the portfolio. We therefore do not compromise on quality as a matter of conviction. We do not only rely on the official credit ratings, but also carry out our own debtor assessment. Furthermore, we also systematically monitor conspicuous price changes.
How is the anti-cyclical element in my portfolio ensured?

We ensure the anti-cyclical element at the investment category level in portfolio management for mixed mandates (i.e. all mandates that are not pure equity mandates) by setting ranges around your individually defined strategic equity ratio. We execute a re-buy during a crisis, a run on during recovery and a so-called rebalancing if the rise 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 by profit-taking. This enables us to carry out long-term, anti-cyclical management of the portfolio for you.

At the level of the individual stocks, rebalancing also takes place periodically. This involves selective profit-taking in order to bring the size of the positions back into the direction of the above-mentioned equilibrium weighting. Entire positions are sold if we conclude, based on fundamental factors, that we no longer wish to invest in a particular company in the future.

How is my portfolio built up?

When building up a new portfolio, we proceed in a stepwise manner when you bring in some liquidity. It is important for us to diversify on the time dimension, as there is no optimal timing. This is to avoid that you get the worst possible timing for your entry before a market correction. We therefore spread the construction of your portfolio over a period of time, which can be several months, depending on market developments. The opportunity cost of hedging against a suboptimal entry point is less participation during the build-up in case of rising markets.

What is the purpose of research?

Our professional analysis has the primary task, in terms of risk management, of selecting top-quality stocks and bonds that promise long-term success rather than short-term spectacle. Once evaluated, our quality values are continuously monitored. We are convinced that the liquid markets in particular are very efficient. This means that prices reflect all available information. Therefore, research as a "forecast supplier" is enormously overestimated from our point of view. There are various asset managers with hundreds of analysts; their investment performance is nevertheless often very poor. Most analysts are also inherently pro-cyclical. The stock selection we practice, on the other hand, follows a very systematic selection process with no short-term forecasting character.

Who decides on investments?

The management of the various investment categories is defined by the investment committee. The investment committee also decides on the equities admitted to our mandates and, on the bond side, on the eligible debtors. The implementation of the specific client portfolio is carried out by the relationship manager in close cooperation with the portfolio manager.

Lilly Ottenburg
«We are constant, always transparent and fair. Our long-standing clients confirm this!»
Lilly Ottenburg, Assistant