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LMM Compass Edition 8 / 3rd Quarter 2018

The trend towards sustainability in the investment process cannot be ignored. In the implementation has to be borne in mind, that this does not create unnecessary costs or higher risks. Clear guidelines and their consistent monitoring are a prerequisite for this. Read in our specialist article what it is all about and how we can support you.

Markus Häni Markus Häni

Deputy CEO

Martin Frick Martin Frick

Director

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INVESTMENT STRATEGIES

Most stock markets developed positively in the 2nd quarter 2018. Exceptions were emerging market stocks which suffered from significant price setbacks. Bonds and currencies from these countries also suffered from price declines. The reasons are believed to be higher U.S. interest rates and the stronger US Dollar. Interest rates in Europe remain low, whereby Italian bonds had to put up with substantially higher interest rate premiums due to the political uncertainty.

After the negative performance in the 1st quarter 2018, investors benefited from the recovery on the stock markets in the 2nd quarter. Those that particularly stand out and were able to post gains were investment strategies with a higher allocation in stocks, such as “Balanced” and “Growth”. Investors in the Eurozone were able to benefit as well from currency gains on US Dollar positions. Because the US Dollar revaluated due to higher interest rates and a stable economic growth.

Calculation LMM; Period 31.12.2017–30.06.2018 (before costs).
Please note: Performance figures gross (Custody and management fees not included).

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SUSTAINABILITY IN THE INVESTMENT PROCESS

The demand for ethical, social and ecological investments is increasing and it is a need of the financial participants, to integrate these criterias into the investment and controlling process.

A large number of private as well as institutional investors consistently focus on ethical, social and ecological investments. This includes, for example:

• Norwegian sovereign wealth fund
(exclusion of tobacco and armament)
• Swiss Re (consideration of ESG-criterias)
• SNB (no producers of outlawed weapons)
• WWF Switzerland (consideration of ESG-criterias)
• Publica (excercise of shareholders rights, ESG-criterias)

The worldwide sales figures confirm, that there is an increasing demand for sustainably produced products and services. Moreover, many countries are subsidizing sustainable alternatives whereas resource-intensive production processes are increasingly regulated. Sustainable investments are considered as innovative and enjoy a good reputation with a corresponding positive image for the investor.

There is an absence of international binding guidelines and standards by the regulators. As a result, the heterogeneity of the criterias and their scope for interpretation is high. The consideration of sustainable factors in the investment and controlling processes requires therefore a high degree of expertise.

Incentives and challenges

As an independent investment controller we offer different service modules. These services can be subdivided as follows:

We are gladly at your disposal for a presentation.

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LMM IN FRANKFURT AM MAIN

We are pleased, that we have been able to engage Melanie Kühlborn-Ebach, an experienced specialist for the buildup of our German office based in Frankfurt am Main. Apart from graduating in Business Administration and a masters degree in Real Estate at the European Business School, she has successfully built up a specialised know-how in the institutional investment business.

Melanie Kühlborn-Ebach is focussing in Germany, amongst others, on German foundations. Charitable foundations are particularly required to be in compliance with the fiduciary duties. Maximum transparency and control with regard to the investments is therefore essential.

MELANIE KÜHLBORN-EBACH
MELANIE KÜHLBORN-EBACH

Family
Married, three children
Hobbies
Walking, Swimming, Skiing, Art and Culture
Motto
«You can’t change the direction of the wind, but you can readjust the sails.»
Aristoteles

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LMM Investment Controlling Ltd. is an independent provider of Investment Controlling services and represents the interests of private and institutional clients towards banks and asset managers. Apart from the head office in Vaduz, LMM has branches in Zurich, Dubai, Vienna, Frankfurt and Sydney.

Disclaimer: LMM takes the utmost care in compiling the information. We don’t grant any warranty, including liability towards third parties, with respect to the accuracy, relevance and completeness of the information and opinions published in this newsletter. Pease take note of our amended data privacy policy on our website.