Press release news

09.12.2011

Multi Asset analysis: Fully comprehensive portfolio insurance – focus on money market and international bonds

SEB Asset Management’s Multi Asset team believes the markets are still in crisis mode. “We have switched our Multi Asset Total Return (MATR) portfolios into defensive mode in line with this,” said Jens Kummer, Head of Multi Asset. “We already significantly scaled back our equity exposure in the summer. Over the past few weeks, we have also removed all euro-denominated government bonds from the MATR portfolios.” The bond markets remain under pressure as a result of the ongoing debt crisis in Europe.

The portfolios are now focused mainly on money market products and selected international bonds from the USA, Japan, Scandinavia and Australia. In addition, the MATR funds are invested in corporate bonds and gold. Exposure to European government bonds has declined from 80% to 3% for the balanced SEB Multi Asset Balance since the summer, and from 60% to 0% for the conservative SEB Multi Asset Defensive plus.

In the equities area, the Multi Asset team considers that, at best, investments in selected emerging markets such as Indonesia and the Philippines as well as in the food and software sectors remain attractive.

SEB Asset Management’s Multi Asset team analyses long-term expected returns and short-term market risks for 100 different investment classes. In order to be able to make a timely exit from high-risk asset classes or to invest at an early stage, it measures the absolute and relative performance of the different investment classes and their correlation to each other. The momentum indicator is used to produce a meaningful early-warning/risk system. This works like a set of traffic lights, with the asset classes to be avoided shown in red. Asset groups for which an investment is recommended are shown in green. The amber positions are under observation.

The assessments mentioned are part of our proprietary Multi Asset Total Return model, which has been used to manage the SEB Multi Asset Fund’s investment process since 2008.

Download