Bonds – Swiss franc
Swisscanto Invest by Zürcher Kantonalbank
The Citywire AA-rated fund manager is navigating a challenging sector in his SWC (CH) BF CHF (II) N and SWC (CH) BF Nachhaltigkeit CHF N funds.
Financials is the biggest sectoral allocation of the SWC (CH) BF CHF (II) fund with 55.86% of exposure, followed by the government bonds, which take 28.59% of the strategy.
The fund is underweight bonds with more than 15 years of maturity, with its exposure at 31.66% versus 36.85% in the benchmark Swiss Bond Index (SBI) AAA-BBB Total Return. Bonds with maturity from three to five years are an overweight, at 11.23% against 9.15% in the benchmark.
Among top positions are Swiss government and cantonal bank bonds with Kanton Zurich closing the top 10 holdings.
Speaking to Citywire Switzerland in July 2016, shortly after Swiss 50-year bonds dropped into negative territory for the first time, Grimm said he is not reaching for riskier assets.
Instead, he invests in medium- and long-term bonds and doesn’t hold those to maturity.
‘The return for longer dated bonds is still positive over a 12-month horizon. Buying a 10-year or 20-year government bond and holding it, for instance, for one year may lead to a positive return as you roll down the curve.’