Institutional-grade access
What is normally reserved for governments, communities and institutions, made available to private clients:- Large pension-fund style management
- Actively Managed Certificates (AMC)
- Institutional mandates
A wider choice of assets
The allocation is diverse and dynamic, drawing on equities, international stock-exchange bonds, mutual funds, credit, and unlisted assets including private companies, real estate and infrastructure.Always benchmarked
The offering is measured, not described. Bordier states that it sets out to match or better institutional benchmarks, and reports against them with monthly and quarterly reporting, and risk and performance overviews.Core Holdings: how the equity book is built
Core Holdings is Bordier’s own method for analysing listed equities, and it is the clearest expression of the house philosophy in practice. Its premise is stated plainly:The preservation of capital is the source of long-term outperformance.The approach is deliberately not indexed. Bordier’s position is that continually buying and selling, and practising indexed wealth management, is a method of the past. Core Holdings is drawn instead from a private-equity philosophy: the bank does not only purchase securities, it invests in companies, selected on the strength of their economic model, resilience, cash-flow visibility and creation of value across economic cycles, at a reasonable price.
The funnel
The selection narrows in four deliberate stages.What the screen looks for
- Above-average and sustainable organic growth
- Free cash flow well into positive figures across economic cycles
- Return on capital employed consistently above the cost of capital
- Controlled balance-sheet leverage and debt, for safety of the investment
- Cash-generation capability, economic value creation, return on equity, modest debt ratios
What it screens out
Companies whose business model shows signs of becoming obsolete, described by Bordier as potential fallen angels in the making. Companies excessively exposed to environmental, social and governance risk factors. And companies overexposed to a single region or product.How the survivors are valued
The remaining businesses are put through in-depth fundamental analysis: end-markets, competitive positioning, market drivers, and the long-run resilience of sales and margins. A standardised discounted cash-flow model, applied uniformly across sectors, then determines fair value for each stock. The result is 30 to 40 companies offering long-term prospects at the most attractive valuations. The selection is reviewed on an ongoing price-to-fair-value basis, and the whole process repeats to refresh the eligible universe and identify what should be added or removed. Every constituent is treated as a holding recommendation in its own right.How portfolios are constructed
Diversification is the organising principle, and how it is achieved changes with the size of the portfolio. Smaller portfolios use collective vehicles, Bordier funds, ETFs and other funds, which maintain diversification and control costs. As the portfolio grows, single lines are gradually introduced, allowing more customisation while keeping diversification intact.Related
- Our approach to investment, the philosophy behind this.
- Investment solutions, the full range of asset classes.
General information only. Not investment advice, not a solicitation and not an offer. Past performance is not a guide to future performance, and the value of investments can fall as well as rise. Availability, eligibility, currencies and minimum sizes differ by jurisdiction and by client and are not stated here. Speak to your banker about your own circumstances.