Future economic development is crucial for performance in the capital markets. The core competence of MainSky lays in proprietary models to predict structural and cyclical economic trends and, based on this, actively align the portfolio structure. The analysis and opinion formation is supported by specifically developed quantitative models. However, there is no "absolute belief in a model" and all information is analysed to reach an economically plausible picture of the market. The performance potential of individual markets or market sectors therefore derives from basic macroeconomic analysis. Technical and sentiment-related indicators will also be taken into account with regard to the timing of investment decisions.
MainSky pursues an active management approach by adjusting the portfolio structure according to the cyclical opportunities and risks in the financial markets. The core of the MainSky investment approach is to control risk utilisation. This means that the sensitivity of the portfolio against the risk is increased in anticipation of positive market phases or lowered in difficult market phases. Thus, at MainSky risk management is viewed as an integral part of the investment process.
The adjustment of portfolio risk according to the predicted market environment is the core of MainSky’s investment philosophy. The key to this is the daily risk report for each mandate, which indicates the risk load of the mandate and the risk contribution defined for each position (i.e. indicates whether the position increases or decreases risk). The risk report contains all customary risk indicators for the mandate level (VaR, maximum drawdown, volatility, etc.).
Another element of MainSky risk management is portfolio stress testing. This simulates extreme scenarios that are not captured by traditional VaR methods. Portfolio stress testing is carried out at regular intervals. In addition, MainSky performs Principal Component Analyses (PCA) for the portfolios. These analyses identify systemic risk factors.
Based on the vast experience of the MainSky team, we have developed our own primary research which is the basis for investment decisions. Since our research is completely independent, we can identify attractive markets impartially and solely in the interest of our investors in any market situation. The advantage of this approach is reflected in our performance.
In our research publication "Market Outlook and Asset Allocation" we put together the results of our analyses in detail on a regular basis and present our asset allocation. The publication is available free of charge for MainSky investors enabling them to follow current positioning in a transparent manner.
In January 2013, Telos certified the Bond Absolute Return Fund with their AA+ rating for very high quality standards.