The global landscape is undergoing profound change. New centres of power are emerging, geopolitical tensions are rising, and technological innovation is accelerating global competition. In this video, Philipp Lisibach, CIO Europe at LGT Private Banking, and Dr Stefan Legge, economist at the University of St. Gallen, discuss the question of how investors invest in a world where geopolitical interests shape the financial markets.
For investors, understanding geopolitical developments alongside economic trends is becoming increasingly important. In the latest edition of Big Picture our experts share their views on how the global order is changing and what this could mean for economies and financial markets over the long term.
Their discussion focuses on the strategic competition between the US and China, the role of innovation, resources and state influence, and the increasingly close interplay between economic and political interests.
Stefan Legge is a Lecturer in Economics and Head of MBA Curriculum at the University of St. Gallen. He received his PhD in Economics in 2016 after holding visiting positions at Princeton and UC Berkeley. His research, published in leading journals, focuses on trade and macroeconomics. His opinion on current developments is regularly published in leading international media.
Philipp Lisibach is Chief Investment Officer Europe and Head Investment Strategy & Themes for LGT Private Banking in Zurich. In this role, he is responsible for the LGT Europe House View, which includes macroeconomic forecasts, tactical investment positioning as well as thematic investments and research. Philipp Lisibach is Chairman of the LGT Europe Investment Committee.
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Essential sources of information
The analyses we forward are based on publicly available information that we consider to be reliable. For the compilation of the analysis, publications by domestic and foreign media and news services (e.g. Reuters, Bloomberg, Vereinigte Wirtschaftsdienste (VWD) etc.), business publications, trade publications, statistics and rating agencies were used, together with information from the issuers of the analyzed securities – mainly via the Internet, but also in writing or by telephone. We also procure information from investment banks (sell-side research and primary research).
Reference regarding valuation rates
Unless otherwise stated or specified, the rates used in the analysis are normally the share prices provided by the news agencies Reuters and/or Bloomberg at the close of the stock exchange of the domestic market of the analyzed security or the relevant principal market of this security on the respective local stock exchange on the eve of the day of compilation.
Explanation of investment recommendations for stocks
We obtain our investment recommendations for stocks from an external provider of independent research, CFRA. The analyses are prepared by CFRA and are not the result of analysis by LGT Bank (Switzerland) Ltd. LGT Bank (Switzerland) Ltd. is licensed by CFRA to pass on the analyses to its clients and accepts no liability for the content of the analyses. The analyses produced by CFRA follow a fundamental or a quantitative model. Recommendations based on a fundamental analysis are prepared by a CFRA analyst on the basis of CFRA’s STARS (Stock Appreciation Ranking System) approach. This approach assesses the investment potential of a stock at the time the investment recommendation is made. Quantitative-based recommendations are determined by measuring several factors from large amounts of data from various sources. This multi-factor approach considers financial information, key performance indicators, market data and assessments in order to determine the financial health and management quality of a company, the valuation, the market sentiment and the price momentum. The securities are then compared to their sector peers and rated, resulting in the investment recommendation. The analyses are provided to clients for information purposes and do not take into account the investment objectives and financial situation or other individual requirements of the recipient. Potential investors should therefore always obtain individual advice from their relationship manager based on their personal circumstances.
Explanation of investment recommendations for bonds
We use quantitative methods to create our investment universe. The methods applied include the use of classification algorithms, such as a bagged decision tree for evaluating the accuracy of issuer ratings and hidden Markov chains for evaluating the issuer’s transition probabilities and probabilities of default. The suitability of the issues for admission to the universe is determined by combining the quantitative evaluation of the issuer with the evaluation of the price/spread attractiveness of the issues. The “on list” attribute is based on a purely quantitative approach that factors in the market price of the credit risk, the valuation of the equities and associated instruments, the company’s gearing, the structure of the liabilities, the size and the rating by the rating agency. You can find more information on the quantitative selection procedure in the relevant document on our website: www.lgt.com/fixed-income-methodology
This publication does not constitute an issue prospectus, listing prospectus, or any other kind of prospectus. Furthermore, this publication does not constitute an offer to subscribe or any other transaction or obligation.
Criteria for selecting the “top pick” bonds
The selection of the top picks is based on quantitative and qualitative methods that are described in detail in the relevant document from page 15 onwards on our website http://www.lgt.com/fixed-income-methodology. This publication does not constitute an issue prospectus, listing prospectus, or any other kind of prospectus.
No guarantee is provided that the publications and information are up to date. Investment decisions should therefore always be made on the basis of the current prospectus and/or the complete documentation and publication of the third party/fund issuer (in particular the key investor information/PRIIPs KID (packaged retail and insurance-based investment products key information documents)) and following consultation with an expert. This fund recommendation does not meet all the statutory requirements for guaranteeing the impartiality of financial research. The Swiss Bankers Association Directives on the Independence of Financial Research do not apply to this recommendation. It does not constitute financial analysis within the meaning of the Liechtenstein Ordinance on the Preparation of Financial Analysis according to the Law against Market Abuse in the Trading of Financial Instruments. LGT Bank (Switzerland) Ltd. and/or its affiliated companies are not subject to any prohibition of trading prior to the publication of financial research with regard to the recommended funds. The research can form the basis for the investment decisions of LGT Bank (Switzerland) Ltd. itself and/or those of its affiliated companies. It is possible that LGT Bank (Switzerland) Ltd. and/or its affiliated companies might receive retrocessions from the issuers of the funds dealt with here.
All selected third-party funds are subjected to a thorough quantitative and qualitative analysis process prior to inclusion in the LGT FundGuide. Selected third-party funds are also subject to a continuous monitoring process.
Country-specific information
LGT funds: The current complete prospectus, the key investor information/PRIIPs KID and the relevant annual and half-year reports can be obtained from the relevant fund managers or their local representatives, from LGT banks or electronically at www.lafv.li.
This recommendation was prepared by LGT Bank (Switzerland) Ltd and not by an independent financial analysis department. Therefore, this recommendation does not meet all the statutory requirements for guaranteeing the impartiality of financial research. The Swiss Bankers Association Directives on the Independence of Financial Research do not apply to this recommendation. Investments in structured products entail a wide range of risks. Investment decisions should therefore only be made on the basis of the valid prospectus or complete documentation following consultation with an expert. This is not a financial analysis within the meaning of the Delegated Regulation (EU) 2017/565 in conjunction with MiFID II.
Information about foreign currencies were produced by LGT Bank (Switzerland) Ltd. and not by an independent financial analysis department. Therefore, forecasts, observations and price information are subject to change at any time and there is no guarantee that the information is complete. Investment decisions should accordingly be made in consideration of the investor’s personal risk tolerance and within the overall context of the portfolio. The Swiss Bankers Association Directives on the Independence of Financial Research do not apply to currency analysis. This is not a financial analysis within the meaning of the Delegated Regulation (EU) 2017/565 in conjunction with MiFID II.
To determine the LGT Sustainability Rating, the companies, countries and supranational organizations underlying the investment vehicles are assessed according to criteria defined by LGT with respect to the areas of environment (E), social issues (S) and corporate governance (G). Corporate and country-specific sustainability data (raw data) of external data providers feed into this rating. The LGT Sustainability Rating is a result based on criteria and calculation methods determined by LGT. It does not claim to be exhaustive, accurate or up to date. The LGT Sustainability Rating is not substantiated by LGT. Any liability of LGT is excluded. The LGT Sustainability Rating does not constitute advice, an offer, a solicitation or invitation to submit an offer; it is neither a basis for a decision nor a recommendation to buy or sell investment vehicles or other specific products and does not constitute advertising for products or services. Advice from a qualified specialist before making an investment decision is recommended. Investments may be subject to fluctuations. A high LGT Sustainability Rating and a high ESG score do not guarantee a good or better performance of the investment vehicle or other products, in particular in comparison with an investment with a lower LGT Sustainability Rating. The LGT Sustainability Rating must be strictly separated from other analyses and assessments. The ESG criteria applied may differ from individual ideas of the client.
This investment proposal might contain US assets located in the USA (known as “US situs assets”) which might trigger US estate tax consequences. This means, for example, that the estate of the decedent neither domiciled in the USA nor with US citizenship might become liable for tax payment to the US tax authority. Certain estate and gift tax agreements with the USA (see homepage of the US Internal Revenue Service, IRS), however, provide for increased tax allowances or more extensive exemptions, some of which do not apply automatically but require the filing of a tax return or approval by the IRS. LGT recommends that clients consult a qualified tax advisor for further information on US estate tax and the associated reporting obligations and tax liabilities in the USA. LGT does not automatically report tax liabilities to the IRS, the US tax authority.
Where this publication has been distributed by LGT (Middle East) Ltd., related financial products or services are only available to professional investors as defined by the Dubai Financial Services Authority (DFSA). LGT (Middle East) Ltd. is regulated by the DFSA. LGT (Middle East) Ltd. may only undertake the financial services activities that fall within the scope of its existing DFSA license. Principal place of business: The Gate Building (East), Level 4, P.O. Box 506793, Dubai, United Arab Emirates, in the Dubai International Financial Centre (Registered No. 1308).
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