Equity and Bond Mandates
Passive Management
Comes in Serveral Forms
Equity and Bond Mandates
The range of rule-based portfolio management concepts or equities and bonds is extensive, ranging from a strategy that precisely mirrors a market index (passive) to one that adapts an investment universe to a client’s specifications (passive customised) to the systematic integration of ESG criterias into the investment –
an approach that ideally combines sustainability with performance.
Our portfolio management team has years of experience and expertise and continuously monitors the growing universe of indices.
A key objective of the enhanced beta strategies is to significantly improve diversification through professional portfolio management using alternative weighting methods.
Additionally, the risk/return ratio can be optimised compared to standard market indices and benchmarks.
1:1 replication of specific market indices such as:
- Standard blue chip stocks and small caps
- Global government and corporate bonds
- Inflation-linked bonds
- Indices designed based on ESG criteria
Fixed-income: ESG-Compliant and Passive Investing
Sustainable investment strategies are increasingly becoming standard in fixed-income investing. This white paper examines which ESG strategies known from equity investments can also be applied to this asset class.
Customised replication of certain market indices based on individual investor requirements, such as:
- Exclusion of specific sectors, countries, or individual securities from market indices
- Limitation to specific maturities
- Requirements for ratings, seniority, or issuers
- Use of negative and positive lists
The ESG board, created specifically to address sustainability matters in portfolio management, is made up of experts from the portfolio management team and the in-house Sustainability Office.
Their responsibilities are diverse. On the one hand, the ESG board acts as a driver for sustainability-related aspects in portfolio management. This encompasses ongoing monitoring and assessment of specific ESG topics and selecting relevant data providers for evaluating general sustainability risks.
On the other hand, the ESG board serves as an advisory board, for example, on ESG-specific compliance in portfolio management.
The ESG board is also responsible for providing further training on ESG topics in portfolio management. Regular training on this complex subject builds deep knowledge that leads to customer-oriented solutions.
ESG: Multifaceted Diverse Approaches
Best-in-Class
The best companies within an industry, category, or asset class are selected or weighted based on ESG criteria. These companies set the highest standards in terms of environmental, social, and ethical aspects compared to their industry peers.
Exclusions
Certain investments or asset classes are systematically excluded if they meet specific criteria, such as weapons, labor and human rights violations, corruption and bribery, gambling, nuclear energy, pornography, tobacco, or animal testing.
Norm-Based Screening
Investments are assessed for compliance with international standards and norms, such as the UN Global Compact, OECD Guidelines for Multinational Enterprises, or ILO core labor standards.
Green Bonds
Fixed income bonds that generate capital for sustainable and environmentally friendly projects, focusing on renewable energy and energy efficiency projects.
ESG Integration
ESG factors are an integral part of the investment process, taking into account sustainability-related opportunities and risks. The approach enables participation in long-term value growth due to the steadily increasing demand for ESG investments, while also requiring continuous alignment with evolving regulatory ESG requirements.
Thematic ESG Investments
Investing in themes or trends that contribute to a more sustainable future, such as renewable energy or organic agriculture. The strategy benefits from the development of these topics and invests in companies that are influenced by these trends.
The optimisation of the risk/return ratio of rule-based strategies compared to standard market indices or benchmarks:
- Bottom-up and top-down factor investments
- Alternative weighting of index constituents based on proprietary rule-based methods
- Management of portfolios without index references, based on individually agreed rules
- Replication of complex indices throug total return swaps is possible
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