The investment philosophy of Schoellerbank

Our philosophy rests on our long-standing three-pillar model.

We rigorously avoid investments outside our universe.

  • These include all credit risks that cannot be assessed (high yield bonds) and all complex and financial instruments lacking transparency (e.g. hedge funds, asset-backed securities, etc.).

We follow a stringent and verifiable investment process.

  • All key investment decisions of Schoellerbank are reached at the “strategy round”; these decisions are documented and binding.

  • Additionally, there is a rigorous screening process for all products we invest in for customers: Schoellerbank EquityRating, Schoellerbank BondRating and Schoellerbank FundRating.

We are usually anti-cyclical in our decisions

  • Sentiment indicators are an important element in decision-making in addition to the valuation.

  • The aim is to stay ahead of the herd.

The asset allocation of all managed products is defined by the strategy round. The strategy round reaches the key decisions by majority vote and based on anti-cyclical considerations. This body is made up of the management board members and the heads of the expert departments. All themes of market relevance are discussed, and the members of staff from the expert departments contribute their suggestions and analyses. The strategy round defines the tactical asset allocation. The equity ratio, remaining time to maturity of bonds, currency allocation and allocation of the regions are the most important factors.

Picking Individual Securities and Risk Management

The second most important step after asset allocation is the selection of individual securities. For us, the quality of the underlying company or bond issuer is a top priority. In this context, we follow a stringent decision-making process, with quality criteria (star ratings) being defined for each asset class.

We do not define risk based on fluctuations in value (=volatility), but rather on the permanent loss of capital. If you want to minimize the risk of permanent risk loss, you have to start with the selection of the individual equities and bonds. Therefore, risk management is an integral part of the selection process at Schoellerbank.

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