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Risk-based strategies for bond funds and mixed portfolios
The Metzler total-return approach is designed for pure bonds or for mixed funds. As with Metzler Equity Protection, the aim is to enable investors to participate in market gains while ensuring that the portfolio has a certain value at the end of a defined investment horizon. In contrast to Metzler Equity Protection, the valuation floor of the portfolio is not maintained through the use of options but rather through a risk-based process. For this purpose, a starting allocation is initially determined that corresponds to the investor's goals and preferences regarding a valuation floor, expected returns and investment horizon. The portfolio structure is then dynamically adjusted so as to ensure that the minimum return desired can be attained even if market trends are negative.
The Metzler total-return approach can be implemented in a single fund or as a risk overlay to manage overall risk in a master fund management company structure.
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