Active Benchmark Concepts
The propensity for risk of individual investors and their investment goals determines how portfolios will be aligned. Depending on their capacity for risk, Metzler Asset Management offers its institutional customers an array of different equity, bond and multi-asset products.Equities
In the long term, the return on equities tends to exceed that of bonds. For this reason, share portfolios make sense for investors with a medium- to long-term investment horizon
Investment approach and philosophy
The core element of our equity investment approach is a transparent, structured and team-oriented process. Investments are made based on fundamentals and taking a medium- to long-term view. Our aim is to attain an above-average, risk-adjusted performance that is stable over time. Our focus is not on returns alone but also on the customers' propensity for risk as reflected in their strategic goals.
In practice, alpha strategy normally plays a foremost role. Our investment approach differs from that of our competitors to the extent that alpha strategy, portfolio composition and controlling are equal and integral parts. Our objective is to attain the greatest possible incremental return for our customers, meaning the highest possible and most stable information ratio over time. We believe that we can best do this by generating incremental returns in all three spheres and by coordinating these areas.
Depending on their capacity for risk, Metzler Asset Management offers its institutional customers an array of equity products. Our core products are:.
- Core (Eurozone, Europe, Eastern Europe)
- Equities (Japan)
- Growth (global)
- Small caps (Europe)
- Value (Europe)
Bonds
We offer institutional investors portfolio solutions to meet their individual needs. Taking an innovative investment approach, we design bond portfolios aligned to the investor's desired returns and propensity for risk, utilizing various investment categories and capital market instruments.
Investment approach and philosophy
Decisive for the entire portfolio management process is the definition of an investor's strategic long-term requirements. We therefore analyse, together with investors, their investment goals and risk profile. This serves as a basis for defining a strategic benchmark, an individually optimized portfolio structure that is best suited to the return expectations and risk propensity of the investor. The success of our portfolio management is then measured against this benchmark.
We manage our portfolios actively, i.e. for deviations against the benchmark, the active risk taken, we seek the highest possible incremental return. Depending on their risk inclinations, each investor has his own idea of the maximum allowable deviation of the portfolio from the defined benchmark. Our aim is to make efficient use of the scope for active risk available to us.
To this end, we attempt to maximize the impact of our investment decisions by budgeting the risk available and allocating it to the various income sources. Thus only a certain portion of the previously defined active risk is available for each individual decision of fund management. This approach ensures that investments are broadly diversified and that a concentration of risk in the portfolio is avoided.
Metzler's bond products cover a broad spectrum, ranging from money-market investments to European and global bonds to US and high-yield issues. Our core products are:
- Global
- Core
- Investment grade corporates
- High Yield
- Emerging Markets
For investments in North and South America, especially in the US high-yield segment, we draw on the expertise offered by our joint venture partner Payden & Rygel, Metzler/Payden, LLC, LLC. Payden & Rygel is one of the largest independent US asset managers.
Multi Asset
For investors seeking to balance risks and rewards, our mixed funds are an attractive investment instrument.
Mixed funds have a balanced risk-reward profile. As the equity component rises, so does the potential return while the associated risk increases less than proportionately. At first sight, this result may seem paradoxical but can be explained by the pronounced diversification effect offered by mixed funds.
This diversification effect lowers the risk of losses. If you as an investor have to bear a specific balance sheet date in mind while making dispositions, this aspect can be especially interesting.
Mixed funds are also a suitable investment segment for investors who are unable to make allocations between asset classes or do not wish to do so. Through the flexible management of equity and bond ratios, we exploit opportunities in order to attain incremental returns for you over time.
Investment approach and philosophy
We align our mixed funds to the strategic requirements of our customers. We do not view an individual fund in isolation but take due account of the customer's overall investments in structuring the fund. This way, a mixed fund can contribute optimally to a total portfolio.
Our mixed funds range from the "classical balanced portfolio", i.e. a tactical allocation of European equities and eurozone bonds, to multi-asset class portfolios, or "tactical asset allocation" (TAA) funds. In the case of multi-asset class TAA funds, we apply our active-allocation processes to all bond segments available to us, to regional allocations on the equity side as well as to the parameters "style" (growth and value stocks) and "size" (large caps versus small caps) - and hereby generate additional returns for our customers.
