Efficient Investing in bonds
In standard indices bonds are weighted according to issuance volume. The higher an issuer’s debt, the higher its weight in the index. When indexing, the largest borrower is rewarded. This does not yield an optimally composed portfolio.
OLZ portfolio optimisation means clear focus on quality and efficient design of global bonds portfolios.
OLZ predicts the risk properties (volatilities, correlations) for each interest rate zone and derives an optimally diversified portfolio. The target portfolio is the ex-ante minimum variance portfolio.
Portfolio optimisation takes the individual risk factors into consideration. Focusing on best creditworthiness and highest liquidity minimises the counterparty risks (credit risks) and liquidity risks. Minimum variance optimisation leads to optimised diversification of interest rate risks. The currency risks are almost fully hedged effectively.
OLZ minimum variance optimisation is available as funds for a range of investment segments. Direct mandates with client-specific requirements and restrictions are available upon request.
OLZ systematically follows a 3-step rule-based investment process without discretionary range for portfolio management.