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Systematic Multi Asset Solutions

Especially in turbulent market phases, it is important to keep a cool head and take decisions that are not emotional. This is often a challenge even for professional investors in practice. We can provide the fitting solution for risk-averse investors that want to have planning certainty. A rule-based, forecast-free multi-asset strategy with a risk level – defined as volatility – that is kept stable. Broadly diversified and dynamically geared to the current market environment with an investment target that is in line with the range of variation. Additionally, a capital preservation component can be implemented that is aimed at staying within a pre-defined loss limit.

Limit losses

In addition to the multidimen­sional risk manage­ment approach, an individually designed value protection compo­nent can be imple­mented to ensure that the capital employed is protected with a high degree of proba­bility.

Optimal use of risk budget

At all times, the current port­folio is aligned with the objective of optimal util­ization of the risk budget. In this way, the fund participates more strongly in the positive develop­ment of the stock markets in phases of low volatility and reduces the risk ratio in phases of high volatility.

Independent of forecasts

The investment approach is indepen­dent of return fore­casts and focuses on managing volatility as a measure of risk. In order to keep volatility constant at port­folio level, the allocation of the asset classes equities and bonds dynamically adapts to the prevailing market environ­ment.

How dynamic allocation works

The allocation between equities and bonds is made at the top level in accordance with the volatility target. This means that in a low-risk market environment characterized by low volatility and high diversification effects between asset classes, a higher weighting is given to more promising investments such as equities. In contrast, a higher-risk market environment leads to a defensive positioning of the portfolio. In addition, the admixture of near-money market investments is possible in periods of market stress.

How value protection works

In order to ensure that the capital employed is protected with a high degree of probability, a lower value limit is set as an absolute or relative limit which should not be undercut within a certain period of time. The lower value limit is individually defined in advance as a defined percentage or nominal value of the invested capital. The lower value limit usually refers to the current calendar or fiscal year. It can remain static or be dynamically adjusted. 

Risk reduction

When the lower value limit is approached, the risky asset classes are shifted pro rata into near-money market investments.

Risk monitoring

Continuous stress testing of the portfolio and compa­rison of the distance from the port­folio value to the defined lower value limit. 

Risk measurement

On a daily basis, the portfolio risk is calcu­lated on an aggre­gated basis using the indivi­dual risks of the sub-asset classes.

What sets us apart as your Multi Asset Manager

Systematic

  • Rational decisions - even in times of stress
  • Forecast-free management of your assets while ad­hering to an indi­vidual target volatility

Dynamic

  • Flexible investment policy without benchmark orientation
  • Broad diversification of assets across various invest­ment and sub-invest­ment classes and admixture of low correlated sources of return

Individual

  • Individualization of the investment universe
  • Implementation of a super­imposed, syste­matic value assurance stra­tegy to maintain a pre­defined lower value limit is possible

Head of Consultants
Michael Kreibich
Phone +49 40 350 60-170
michael.kreibich@berenberg.de

Product Specialist Solutions
Yannick Lahmann
Phone +49 40 350 60-222
yannick.lahmann@berenberg.de