There are risks associated with investing in securities. Investing in stocks and bonds involve risk of loss. Loss of principal is possible. A security’s or a portfolio’s past investment performance is not a guarantee or a prediction of future investment performance. It is important that you are aware of the characteristics and associated risks of the relevant financial instruments. You can find more information on investment risks in the investment materials and terms.
Investment strategy
Key pillars for capital preservation or growth include emphasis on liquidity and conservatively managed portfolios, keeping costs low and preventing irreparable damage. Core to the philosophy of Laaken is setting up risk and cost efficient investment portfolios. We invest directly in a selection of individual shares and bonds with a long-term horizon.
Determining strategic and tactical asset allocation
The strategic asset allocation is the structural long-term allocation of your assets to the various asset classes like equities, bonds, precious metals and cash. This allocation varies depending on your risk and return objective.
The tactical asset allocation is a temporary deviation from the strategic asset allocation actively effectuated by Laaken with the objective to improve the risk-return ratio (e.g. with equities overweight). Our tactical investment strategy is influenced by, for example, interest and inflation expectations, macro-economic developments and market valuations.
Selecting individual shares and bonds
After determining the strategic and tactical asset allocation, we select individual shares and bonds on the basis of fundamental analysis. With regards to equities, Laaken invests in companies with a strong balance sheet, good growth prospects, reliable management and an acceptable valuation. With major fluctuations in the global economy, these companies should have the flexibility to strengthen their competitive position and emerge as sector champions.
With regards to fixed income, Laaken invests in a wide range of bonds such as sovereign, corporate, convertible and variable rate bonds. Most of these fixed income securities can still generate attractive returns in a low interest rate environment while limiting risk exposure. Lastly, we allocate a small proportion of the portfolio to alternative investments such as gold.
Cost efficient
Selecting individual shares and bonds for a portfolio prevents accumulation of costs, often caused by hidden product fees and other costs in passive or active investment funds of third party asset managers. Avoiding such product costs has become even more important in a low interest rate environment. Only in exceptional cases, e.g. for investments in gold, Laaken makes use of passive investment funds.
Risk efficient
Diversification across asset classes, countries, sectors and currencies is our most important way to reduce risk in the portfolio. Further risk mitigation is possible through purchasing tradable put options as insurance against a sharp fall in the stock market or FX forwards to hedge currency risks. The portfolios are free of leverage.
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