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Seizing opportunities in the bond market
Date:
23. April 2025
‘In light of the uncertain economic outlook and the relatively high equity valuations, we believe that current bond yields are quite attractive compared to equities,’ says Holger Spitzer, Head of Portfolio Ebene at LIGA Bank. Together with his team, he continues to see compelling investment opportunities in euro-denominated fixed-income securities. They are convinced
that an active, quality-focused investment is the best way to harness the potential of the bond markets while keeping an eye on risks at all times. In the following interview, Holger Spitzer shares insights into the investment opportunities and strategic approach behind the new LIGA Euro Bond Fund.
Holger Spitzer: Bonds will play an important role in portfolios in the coming years. Unlike cash and money market instruments, euro-denominated bonds are likely to see price appreciation if key interest rates in the eurozone continue to decline. This strengthens the role of bonds as both a source of diversification and a stabiliser for equity exposure in portfolios. Portfolios have benefited from the negative correlation between equities and bonds, especially in times of high equity market volatility, such as during the global financial market crisis in 2008/2009, the Covid-19 pandemic in 2020, or more recently the market turbulence in summer 2024.
In addition, bonds provide predictable yields. Newly issued bonds over the past two years now provide solid, stable (coupon) income for the portfolio.
What does the new fund invest in, and how do you manage risks?
The new LIGA Euro Renten Fonds is an actively managed, globally diversified bond mutual fund. It invests worldwide in euro-denominated government bonds, govern-ment-related/supranational bonds, covered bonds, corporate bonds, and financial sector bonds with strong credit ratings (investment grade).
We also have the flexibility to invest in the euro bond markets that we consider at-tractive, always within the bounds of our investment guidelines. Duration risks and selected country risks can be hedged using exchange-traded futures.
What are the key focus areas of your fund strategy, and what are your strengths?
In times of global uncertainty, we emphasise diversification and quality in the LIGA Euro Bond Fund to provide a stable anchor within the portfolio. We consciously avoid higher-risk sources of return, such as subordinated debt, high-yield bonds, foreign currency exposure, or the addition of target funds. Our strength lies in bond selection and the corresponding curve and maturity positioning.
What role does sustainability play in your funds?
The LIGA sustainability indicator forms the basis of the investment universe for all our funds. It consists of our in-house criteria for assessing the sustainability of in-vestment positions (equities or bonds) based on the ‘ethical and sustainable in-vestment’ guidelines issued by the German Bishops Conference. In addition to standard environmental, social and governance (ESG) criteria, aspects of the Chris-tian worldview are also taken into account. Our assessment is based on data from MSCI ESG Research.
How does the LIGA Euro Renten Fonds differ from your other funds?
The LIGA Euro Renten Fonds invests globally in euro-denominated bonds, making it an excellent counterpart to our LIGA Globale Aktien AK I (ISIN DE000A2QCX45), which focuses on globally diversified, high-quality equities. Investors can choose their own equity and bond allocation on a modular basis. For those who prefer a hand-off approach, the LIGA Stiftungsfonds AK S (ISIN DE000A2JF782) is an ideal choice. In this fund we actively manage both bond and equity allocations. It is a globally diversfied multi-asset fund, designed to deliver attractive returns with a maximum equity allocation of 35 per cent.
Lastly, what distinguishes LIGA Bank?
Founded more than 100 years ago, LIGA Bank is a member of the cooperative fi-nancial group focusing on churches, social organisations and institutions as well as housing construction companies. Our operations span the entire southern region of Germany, with assets under management exceeding 20 billion euros. Our company is primarily known for its deep of expertise in securities and sustainability. We have been offering professional asset management services for more than 20 years and are a proud trading book institution, Pfandbrief bank, and systematic internaliser. Over the years, we have built a network of national and international contacts that we are happy to share with our clients.
A summary of your investor rights can be found at www.universal-investment.com/en/Corporate/Compliance/Investor-Rights. In addition, we would like to point out that Universal Investment may, in the case of funds for which it has made arrangements as management company for the distribution of fund units in other EU member states, decide to cancel these arrangements in accordance with Article 93a of Directive 2009/65/EC and Article 32a of Directive 2011/61/EU, i.e. in particular by making a blanket offer to repurchase or redeem all corresponding units held by investors in the relevant member state.
An investment in a Fund is a risky investment and investors in the Fund may suffer a loss in value up to an amount equivalent to a total loss of the entire capital invested in the Shares in the Fund. Accordingly, potential investors should have adequate and sufficient liquidity to economically bear a total loss of their investment in the Fund. When deciding to invest in the advertised fund, the investor should also take into account the sustainability aspects regarding the characteristics or objectives of the advertised fund as set out in the prospectus. Further information on the sustainability aspects of the fund can be found in the web document, the sales prospectus and the pre-contractual product information. This can be found at: https://fondsfinder.universal-investment.com/en/DE/Funds/DE000A40RCJ2/downloads.
