Bond process: adding value through interest-rate trend analysis and active portfolio management
Given the strong dependency of the bond markets on macroeconomic factors, we link our fundamental analysis with findings from Behavioral Finance.
- The LGT evaluation model is used to determine the risk/return profiles for all regions/countries, the duration, the relevant credit segments and currencies, as well as the corresponding tactical earnings estimates over a period of three to six months.
In the model, economic fundamentals are brought together with technical indicators and implemented in balanced, optimised bond portfolios using the Black & Litterman approach. - Risk management is carried out using the LGT Bond Risk Model developed in-house at LGT. This is a fixed, active component of portfolio construction. The aim is to work from this integrated and forward-looking basis to increase returns and reduce volatility.