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.
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.
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.