Principles and Investment Process
We pursue a globally-oriented, flexible, undogmatic and themes based «top-down» investment approach with a focus on risk-adjusted returns.
We place great emphasis on risk management during both the building and day-to-day management of a portfolio. Actively managing the asset allocation (cash – bonds – equities – commodities – currencies) is a key aspect of our portfolio management approach.
Our experience has shown that a few asset allocation decisions per year represent the biggest performance drivers.
At the same time, we believe that the changes made within the portfolio weightings must be pronounced.
Once the «top-down» investment themes and weightings have been determined, the portfolio is constructed from the «bottom up» with the following investment instruments: individual securities (equities, bonds, etc.), ETFs (passive exchange traded funds) and/or specialised investment funds (for niche markets, themes or sectors.
Empirical studies have shown that the accuracy of forecasting models for the financial and capital markets is exceptionally low when it comes to predicting the mid to long-term performance of individual currencies, stock market indices, etc.
As a result, we place a much greater focus on interpreting indicators that show us the current state of the market and the direct impact (over the next 3 to 12 months) this could have on the movement of securities prices rather than developing proprietary long-term forecasting models.
In doing so, valuation data is analysed, evaluated and finally used to make investment decisions that we break down into the following two key areas («ALTRAFIN’s Investment Monitor»):
- Fundamental indicators – «How Markets Should Be Acting»
- Behavioral economics and market-related indicators – «How Markets Are Acting»