Get differentiated exposure to fixed income risk factors and return drivers through corporate/sustainable credit, emerging market and inflation-linked bond portfolios
While many institutional investors focus on traditional sovereign and corporate investments within their fixed income allocation, they may be overlooking opportunities to get specific exposures through specialized strategies. LGT Capital Partners focuses on three principal themes to provide differentiated exposure to fixed income:
Each can serve to balance out a bond allocation within a larger portfolio.
Sustainable credit solutions are growing in importance. LGT Capital Partners helps to devise sustainable portfolios through an offering that dates back to 2009. It combines in-depth ESG analysis of companies with fundamental criteria to select assets that have an attractive ESG profile and can outperform over the long term. Key to the process is the firm's proprietary ESG Cockpit, a state-of-the-art tool that scores companies on a wide range of ESG metrics, enabling us to achieve financial return as well as sustainable impact.
Our emerging market bond offering can provide enhanced returns over developed markets, with limited increase in risk. Many emerging markets are structurally and economically better positioned than developed countries in terms of balance of payment surpluses, foreign exchange reserves and economic growth. Such attractive fundamentals give them a compelling risk-return profile. To capture these opportunities, we use a systematic investment process that combines active management with a conscious risk taking, focusing on liquid, accessible bond markets in emerging economies.
Inflation seemed like a remote threat for many years, but after immense central bank interventions to prop-up tepid economies, that very intervention adds to long-term inflation risks. Inflation expectations that are below historical average in many countries provide investors with attractive opportunities to mitigate inflation risks. Our global inflation-linked bond offering is designed to improve the portfolio robustness in inflationary scenarios, leveraging a team that has been actively investing in this space since 2001.
All strategies are driven by an experienced team of 15 fixed income/credit specialists, who leverage an investment process and risk management framework that has been mastered over 22 years. With USD 8 billion under management, the team manages portfolios across the three core themes as well as drawing on the expertise of external managers for additional strategic depth.