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.
Active
Laaken is an active investor that deliberately deviates from passive investment indices by self-selecting financial instruments in order to achieve higher returns and better risk-return ratios compared to the benchmark.
Diversification
Diversification to the various asset classes, countries, sectors and currencies is our most important way to reduce risk in the portfolio. In economic downturns we may want to increase exposure to bonds and decrease exposure to equities. In economic upturns vice-versa.
Quality
Laaken selects quality investments on the basis of the following characteristics: sustainable strategy, experienced management, good track record, acceptable valuation, consistent cash flow and dividend and low debt levels. This strategy should enhance the risk-return profile leading to market outperformance.
Sustainability
Laaken integrates ESG criteria in its investment policy and believes that good returns and sustainable development can reinforce each other. Laaken complies with the exclusion list of the Norges Bank, the investment manager of the Norwegian sovereign wealth fund. Laaken has been a signatory of Principles for Responsible Investment (PRI) of the United Nations since 2016.
Liquidity
Daily liquidity in financial instruments is important in order to adapt the portfolio allocation to changing markets, at all times. For this reason, Laaken does not invest in hedge funds and structured products or makes use of leverage.
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.
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.
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.
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.
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.
Are you interested in our services or your options at Laaken? Please contact us.