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Investments in the mid-yield area represent an interesting alternative to investments in bonds with good credit quality. The aim of the investment is to generate a yield greater
than that which can be achieved by investing in euro government bonds.
The focus is on active portfolio management within specific investment categories (as defined by Moody's). Investments are made within the bandwidths between a minimum rating of
Baa3 and the maximum rating of A1. The emphasis is less on public sector debtors and more on corporate bonds, where relative performance depends on company-specific
and general economic factors.
Securities are selected on the basis of a disciplined approach. The loan loss risk is kept as low as possible firstly by means of continuous monitoring of the positions and
secondly by ensuring the broadest possible debtor diversification and the best possible sector allocation balance. The prudence principle is always applied in assessing debtors.
As soon as investments slip into the "non-investment grade", they must be sold within 14 days.
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Volker Wehrle
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| Head of Fixed Income, Vontobel Asset Management |
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Martina Honegger-Romahn
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| Portfolio Manager Public-Sector Bonds, Vontobel Asset Management |
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