Portfolio components

Regardless of whether portfolios are globally diversified or focused on specific asset classes (equities, bonds), we structurally divide them into three components:

  • A stable, long-term anchor component focused on low turnover cash flows
  • A theme-based component where tactical changes can play an important role.
  • A risk management control area for cash/liquidity and tactical hedges. 
In the theme-based component, we may include emerging markets, small caps, special situations such as countercyclical positions or technology and biotechnology stocks in equities. In the field of fixed income, we may include high-yield bonds, emerging market bonds or so-called “Fallen Angels Bonds”.