Tailor-made solutions for individual problems
After more than a decade of low and negative yields, bonds are trading at more reasonable and positive levels following the sharp rise in 2022. In many investment-grade segments, especially non-financial and financial bonds, euro bonds are again offering yields of 3% and more.
This opens up the possibility for investors to act more strategically again, away from traditional benchmark-oriented investment approaches, which tend to be more trading intensive, and to rely more on individual bond strategies. This is because the focus is no longer on avoiding negative interest rates and penalty charges, but rather on ordinary income, individual problems and tailor-made solutions.
In this Insights publication we present three individual approaches:
- target maturity portfolios;
- ladder structure portfolios; and
- payout-oriented bond portfolios.
We discuss possible applications as well as advantages and disadvantages.
Authors
Felix Stern
Felix Stern joined Berenberg Asset Management more than 25 years ago as a fixed income portfolio manager. Today, the Senior Portfolio Manager heads the Fixed Income Euro Balanced team and is responsible for the selection of defensive bonds from the investment grade segment as well as specializing in short-dated bond concepts. He is also the main portfolio manager responsible for several Berenberg mutual funds. After several years in the market research department of British American Tobacco (Germany) GmbH, the trained industrial clerk switched to fixed income portfolio management at the beginning of 2000. The graduate in business administration completed his studies part-time at the distance learning university in Hagen and also obtained a degree as CCrA - Certified Credit Analyst (DFVA) as well as CESGA – Certified ESG Analyst (DVFA).
