Investment Philosophy

Holistic investment approach: I believe in a holistic investment approach, which lies at the heart of my Global Unconstrained strategy, as only a geographically and instrumentally flexible approach allows to efficiently exploit market inefficiencies when and where they arise. For this reason, the strategy invests across the full spectrum of fixed income markets, on all currency curves and in all regions. The result is a portfolio invested across all fixed-income sub-segments based on a unified framework.

Investment universe: While the strategy’s allocation options are flexible and unconstrained, the focus – alongside investment-grade and high-yield bonds – lies on subordinated and unrated bonds, with a focus on issuers outside the financial sector.

Exploiting market inefficiencies: The investment strategy uses its unconstrained investment universe to take advantage of various types of market inefficiencies, be they caused by technical, behavioural or regulatory factors, to generate consistent returns across the cycle. For example, the crossover segment – i.e., the transitional zone between investment-grade and high-yield – is systematically evaluated to take advantage of so-called “fallen angels” and “rising stars.” This is because when bonds transition from investment-grade to high-yield and vice versa, mispricings often occur due to supply or demand overhangs, as well as behavioural and regulatory factors that temporarily offer attractive investment opportunities. Another focus lies on exploiting cross-market spread anomalies, by systematically screening for irregularities between market segments. In addition, price inconsistencies of securities of differing seniority are actively exploited by seeking out mispricings in the capital structure of individual issuers. Exploiting different market inefficiencies and strategies that are lowly correlated with each other ensures a robust portfolio and an attractive Sharpe ratio.

Countercyclical approach across the credit cycle: In order to take advantage of the full spectrum of market inefficiencies, the investment approach is characterised by a through-the-cycle philosophy so that, in particular, opportunities arising from investors’ differing time horizons can be seized. Furthermore, the strategy is benchmark-agnostic, as this avoids the inefficiencies arising from the procyclical nature of benchmarks. The strategy thus generally invests counter-cyclically by seizing investment opportunities that are shunned and overlooked by capital market participants.