Global Inflation Linked Bonds
The Global Inflation Linked Bond strategy focuses on delivering inflation exposure at any time. The strategy invests only in inflation-linked bonds issued or guaranteed by OECD countries. The strategy is strictly disciplined towards the investment philosophy which is based on a very deep understanding of the global inflation-linked bond markets. The performance target for the strategy is 0,5% with 35-65 bonds and no positions outside markets in the benchmark.
Our investment approach is based on our fundamental belief about the nature of the market for global inflation-linked bonds. Our fundamental beliefs about the market are:
- Inflation is global,
- Diversification gains are significant (i.e. real rates are not significantly correlated),
- The market for global inflation-linked bonds is well functioning, so alpha creation of 50bp within the benchmark is world class,
- Off-benchmark positions are not sufficiently rewarded.
Emerging Markets Debt Hard Currency
The Emerging Markets Debt Hard Currency strategy has an active investment style. Therefore, our investment universe comprises all emerging markets bonds regardless of currency (hard currency only), issuer, volume and governments ownership. We emphasize a strong risk management, no currency risk and relatively limited interest rate duration risk relative to benchmark, i.e. focus on credit spread risk. We are aware of the asymmetric risk/return profile of the asset class - hence a high degree of issuer diversification in our portfolios.
The performance target is 1%. Our preferred benchmark is JP Morgan EMBI Global Diversified that comprises USD denominated emerging markets bonds with minimum outstanding amount 500m USD and issued by governments or 100% government owned enterprises (quasi-sovereigns).