We use a research methodology and solid asset management approach that has stood the test of time. The fund universe offers a great deal of variety for the fund of funds manager to exploit.
Portfolio construction requires a rigorous approach to equity allocation, the cornerstone being the adage: ‘The price paid determines the return.’
Four performance drivers
- Geographic diversification
- Management style
- From money market to convertible bonds
- Direct lines if required
Decorrelated absolute return funds
- Target annual returns of around 3 % to 5 %
- Replace bonds in a low interest rate environment
Directional absolute return funds
- Control volatility but depend on market trends
- Useful for adding performance without too much volatility
Our team of analysts, specialised in analysing third-party funds, use qualitative and quantitative criteria to independently – without any constraints – research and select the best funds worldwide.
The team consists of analysts and fund managers whose main role is to provide investors with a research and management service totally dedicated to external funds. Drawing on its independence and expertise, this team conducts quantitative and qualitative analyses to define the ‘personality’ of the funds under review and identify those best corresponding to the requirements of our clients and our portfolios.
The team covers all major asset classes: equities, bonds, money markets, commodities, currencies and absolute return strategies. The only exclusions are private equity and hedge funds where the lack of transparency, liquidity and sometimes simplicity runs counter to the principles of prudence historically deployed by BLI - Banque de Luxembourg Investments.
BL Fund Selection: funds of funds which bring together the best expertise
Our BL Fund Selection funds of funds enable clients to invest in funds identified by our selection process, in a range tailored to different risk profiles. Our team of analysts, specialised in analysing third-party funds, use qualitative and quantitative criteria to independently research and select the most appropriate funds from all over the world. The proportion of the different financial instruments (equity funds, bond funds etc.) is actively managed and adjusted according to market conditions.
STEP 1: QUANTITATIVE ANALYSIS
- Analysis of track record over a long period in different market configurations
- Performance consistency
- Fund volatility and maximum loss
STEP 2: QUALITATIVE ANALYSIS
- Management style and methodology
- Clarity of investment policy
- Stability and quality of their management teams
- Portfolio construction
- Asset size
- Risk control
- Cost structure