Investment Approaches

Investment objectives

Whether your investment goal is capital preservation, capital growth or a steady income stream, the universe of Luxembourg-based UCITS funds covers the entire spectrum of investment options. All investment funds will offer a clearly defined investment strategy and performance goal. These might be to produce attractive returns, outperform a specified market, or just to follow the performance of a specific index. Managers use portfolio construction, asset allocation and asset selection to provide you with a balance between safety, growth and income. By pinpointing the level of safety and return they offer, you can select your investments to match your investment profile.

Capital preservation

There is no such thing as a completely safe investment, but funds that invest wholly or predominantly in bonds issued by established governments are largely immune to the risk of default. Other types of asset favoured by cautious investors include the bonds of large and financially stable companies, especially those that deliver attractive and reliable dividend yields. Money-market funds are viewed as a safe alternative and typically compete with deposits offered by banks.

Capital growth

Investors whose main objective is growth will normally look to funds that invest wholly or primarily in shares. The level of return they can hope for, and the degree of risk that they run, depends on the fund's risk/reward balance. An investor seeking moderate levels of growth might invest in a fund holding shares in solid, stable companies. For a higher level of growth, they might pick a fund that invests in smaller, more dynamic companies. Those willing to run the highest risk in the hope of outstanding returns might look to funds that invest in start-up companies in promising sectors or emerging markets.

Income

Some investors prefer a steady stream of income from their investments rather than longer-term growth in the value of their investments, especially as they approach retirement or if they have already retired. Investment funds designed to produce regular periodic income will invest either in bonds that pay annual interest (known as the 'coupon') or in shares of companies that prioritise the payment of dividends to investors.