Around 55 per cent of the Foundation’s assets are nominal values and can thus be categorized as interest-bearing securities. The traditionally rather high share of nominal values ensures a regular income that can be planned and is generally associated with low risk. That is especially important for providing funds which are financed exclusively from ordinary income. Furthermore, this approach avoids large price fluctuations and depreciation.
The nominal values are managed predominantly in-house, a smaller part by two special bond funds. The volume of the in-house managed titles amounts at the moment to 1,014 million euros, the volume of the special bond funds to 512 million euros. Besides a liquidity position that is held in the form of overnight money and short term money as well as short term bonds, the self-administered securities include loans against borrower’s notes, corporate bonds, mortgage bonds, public sector bonds, participation certificates and subordinated securities. A breakdown of the in-house managed securities can also be seen from the diagram above.
The basis of the investment in securities is a semi-active approach in connection with a “steady hand” investment policy. The objective is to achieve the highest possible, and yet safe current interest, while price gains achieved by regroupings of assets do not constitute a major objective. The advantages deriving from this strategy are continuously checked out by means of benchmarking and total return concepts.
Both bond funds are managed actively and with the aid of quantitative models. One mandate contains euro denominated corporate bonds with a medium rating. This portfolio is rounded out by British, Canadian, Norwegian and Australian government bonds, each denominated in the corresponding national currency. The second external mandate consists of medium and long-term US government bonds and emerging markets bonds.