Bond Management

Bond management is in our genes, as we have more than 25 years of experience in the comprehensive management of bonds. The basis is our immunization strategy, in which we optimally combine and actively manage the four most important return components in bond management: Duration, Interest Spread, Yield Curve and Inflation Indexation.

In managing the building blocks, the results of fundamental economic analysis by our award-winning economists are the starting point. The position in the economic and credit cycle determines the maturity, segment and sector weightings as well as derivative strategies.

Duration Management

Our highly successful duration management is underpinned by our multi-award-winning economic research. The »Bantleon Leading Indicators« reliably anticipate the official barometers, allowing us to see macroeconomic trend reversals coming well in advance. Portfolio duration is generally above the benchmark figure in economic downturns and below it in upturns. The extent of this overweight or underweight depends on the fundamental backdrop, the technical situation and the overall portfolio orientation.

Credit Management

The weighting of corporate bonds within our portfolios is managed through a combined top-down/bottom-up approach. The top-down part is guided by macroeconomic analysis of the credit cycle, from which the sector strategy and portfolio weighting are derived. The bottom-up part entails selecting attractive issuers and individual bonds. This straightforward bond-picking is complemented by an active rating and sector allocation process and the use of additional sources of performance. In some phases of the economic and credit cycles, investing in bonds with ratings below investment grade can additionally be an attractive proposition.

Inflation-Linked Bonds

Management of inflation-linked bonds (linker) is essentially based on the overarching inflation expectation resulting from our economic research team. From the divergence compared to the current inflation scenario of the market results a strategic assessment for the use of linkers. We also take account of the high correlation between investors’ inflation expectations and commodity prices in the timing of buying and selling. If those are in a fundamentally/technically motivated uptrend, with the overarching inflation outlook signalling a rise in inflation rates, the allocation to linkers will be increased – and vice versa.

LCR Bond Management

We offer mutual funds and segregated accounts featuring management approaches aligned with the complex requirements of the liquidity coverage ratio (LCR). This allows us to meet the regulatory requirements very reliably while at the same time maximising returns through active management of duration, segment and rating structures. The result is a balanced portfolio with attractive, stable income and a high level of LCR eligibility.