Once the Investment Committee has come to a decision, the portfolio managers implement these in the individual client portfolios. In doing so, they pay particular attention to the individual clients' risk profiles and take any preferences and restrictions that clients have agreed with us into consideration.
In the case of bonds, careful attention is paid on the one hand to an even staggering of the final maturities across several years, in order to ensure that at no time the entire bond allocation comes up for renewal simultaneously. This way, changes in interest rates are evened out. On the other hand, bond holdings are spread across a range of credit ratings according to defined criteria in order to achieve the best possible balance between risk and return.
In respect of shares, we pursue a value-oriented investment approach, whereby fundamental valuation criteria such as, for example, the ratios of price to earnings, to cash flow, to turnover and to book value should be as low as possible but the dividend yield as high as possible. Long term, this approach is far superior to growth and momentum oriented styles. Famous investors such as Benjamin Graham and Warren Buffett have grown wealthy by this approach to investment. It relies rigorously on quantifiable economic factors in order to identify undervalued companies. It stays clear of the volatile moods of markets and media, as well as erratic growth and profit forecasts by analysts. One of the most distinguishing features of value-style investing is that these stocks are often out of fashion at the time of purchase.
Furthermore, depending upon market conditions, precious metals or alternative investments are employed. Liquidity on the one hand acts as a reserve in order to take advantage of opportunities as they present themselves. On the other, it serves as a buffer against fluctuation in value of other asset classes and constitutes an important component of a well-diversified portfolio.