Skip to main content

Risk management in asset management

Our guiding principle is: We consistently make no compromises in quality, neither for shares nor for bonds. Given your objective risk capacity and subjective willingness to take risks, we prefer to increase the equity ratio rather than make any compromises in the quality of the bonds. Diversified equity investments have proven for over 100 years that, as real assets, they compensate for the higher risk of fluctuation by offering higher average returns. However, poor quality can lead to a total loss of your portfolio. That is why security and a solid risk management system are of primary importance. When selecting bonds and equities, we are consistently focused on quality: We want to invest in companies that will survive the next storm, because there will most certainly be one. Asset management is risk management!

Why is asset management also risk management for me?

We believe that returns cannot be directly enforced. However, the quality and composition of investments can be influenced, and this is a fundamental component of risk management. This is what determines your long-term return on investment. For example, it can make sense to avoid a certain market segment even though its return seems tempting. If this market segment involves excessive risk, you will be rewarded for your restraint in the next downturn by the fact that your portfolio will lose less. Avoiding unnecessary losses is a key success factor. However, this requires discipline and resilience; we live these qualities for you.

What does quality mean regarding shares?

We focus our selection on international industry leaders. These must have proven that they generate attractive long-term earnings and meet our requirements in terms of financial ratios, business model, management and sustainability. This evaluation is carried out as part of a structured investment process.

What does quality mean regarding bonds?

With regard to the quality of fixed-interest investments, we concentrate on first-class credit ratings. We limit ourselves to investment quality (at least BBB- according to Standard & Poor's or higher). However, we do not blindly rely on the ratings, but carry out our own analyses regarding balance sheet quality and debt service capability for every possible debtor. If our quality standard is not met, we do not buy the debtor, even if it has a good rating. After the investment, debtor quality is continuously monitored as part of the investment process. For risk considerations, we consistently avoid warrant bonds, perpetual bonds, subordinated bonds, mandatory convertible bonds and other such items.