Our Investment Philosophy

The investment philosophy followed by EDEKT S.A. is based on defining an optimal long-term investment policy framework, and implementing such through the selection of the most suitable portfolio structure that will maximize investment objectives and will reduce cost.

The long-term investment policy sets the general framework governing the client's investment management. This framework includes the definition of the investment objective, the establishment of the long-term investment structure to achieve this goal (strategic asset allocation), the management of short-term changes in the allocation strategy (tactical asset allocation), the implementation of the investment strategy (portfolio structure), as well as the establishment of rules for the measurement, monitoring and evaluation of investments.

EDEKT’s investment approach is based on the following principles / beliefs:

• The decision of a pension fund's long-term investment strategy takes into account the fund's liabilities to employees and retirees, their risk tolerance and their return on investment.
• The decision of the long-term investment strategy is more important than short-term regular market movements.
• The structure of the core-satellite approach provides an effective and balanced combination of systemic risk (beta risk) and excess-returns (alpha) from the selection of securities. In the core-satellite model, part of the portfolio is invested in passive index portfolios (the core) with low relative investment risk (tracking error) and management fees, while the remaining capital is invested in specialized portfolios of high expected return and risk.
• The minimization of transaction costs and management fees is a prerequisite for achieving long-term positive returns.
• Risk management is an integral part of the investment process.