Investment Process
Our investment process is a three step-approach combining both top-down and bottom-up analysis:
I. A macro-economic analysis leads to an outspoken asset allocation and determines equity exposure.
II. Sector selection reflects our strong views and where we believe we can create value for our investors. As a result, our sector exposures do not necessarily mirror the composition of the compareable equity index .
III. Rigorous Stock selection is the ultimate step. It is based on our long standing expertise, in-depth fundamental analysis of the underlying companies and the use of efficient valuation models.
The structure of the portfolios is completed by the use of future positions to determine the net equity exposure and possibly hedge (part of the) currency exposure.
For example, a substantial long equity position can be protected by the sale of stock index futures to achieve our targeted equity exposure.
We fine tune the final exposure to the stock market in a balance between fixed income investment and short index futures: an 80% gross long equity position combined with a 20% short future position means a net 60% exposure, but is more “bullish” than a 40% cash position with a 60% long equity position.