Bank Gutmann Aktiengesellschaft

The Gutmann investment methodology defines how a bespoke client portfolio is designed. For this purpose we combine Gutmann’s assessment of the market with client-specific factors (= Gutmann’s taking-the-measure process).

The aim of this process is the assessment of the economic situation over the short, medium and long term and the resulting trends in the financial markets. The Gutmann market assessment relies on fundamental factors and an econometric time series model.

The fundamental factors are based mostly on traditional economic indicators, taking into account both microeconomic factors (e.g. corporate earnings) and macroeconomic factors (such as inflation expectations). In addition, we have developed and selected a number of proprietary indicators permitting a better assessment of the development of economic activity at the level of the G7 countries. Results of surveys conducted among consumers and businesses are also taken into account.

Another important contribution comes from our external research partners. These are world-wide leading providers of independent global investment research including, among others, Capital Economics, BCA (Bank Credit Analyst), GaveKal, Woody Brock of SED (Strategic Economic Decisions).

For the large economic areas, it is mostly medium and long-term economic trends that are identified by looking at the fundamental factors and analyses; for Emerging Markets, short-term market expectations are derived from this type of information.

The econometric time series model is used to assess short-term trends at major financial centres. This model is based on stock exchange index time series for equities, fixed income and money markets. From historical ratios we derive short-term expectations for individual markets. This econometric time series model was developed jointly with Dr. Gerd Infanger, Professor at Stanford University, California, an expert in the field of stochastic optimisation models, and is used exclusively by Bank Gutmann.

The influencing factors described above are analysed by the Gutmann portfolio management team on a continuous basis. The result is the Gutmann market assessment. It assigns relative weights to asset classes (equities, bonds, alternative investments), regions, currencies, and maturities.

It all starts with taking the measure: in the Gutmann taking-the-measure process, we work with you in taking stock of the key conditions that are important for you and your investments. Your expectations regarding returns and your personal risk tolerance are as important key parameters as the expected duration of the investment and the amounts you plan to withdraw. Legal and tax aspects are also taken into consideration. The entirety of client-specific information determines the customised design of the portfolio. Taking-the-measure is a recurring process, as a periodic review of your circumstances is a necessary prerequisite for understanding your needs.

The final step in the Gutmann investment methodology is the design of the customised client portfolio. Building on the client-specific details obtained from the taking-the-measure process and the long-term expectations of the Gutmann market assessment, we define the strategic orientation of your portfolio, which also represents the benchmark for our portfolio management. The short- and medium-term expectations of the Gutmann market assessment are implemented through tactical deviations from the strategic orientation within the limits agreed with you for your investments. This is done with the objective of generating additional returns versus the benchmark.

The Gutmann investment methodology is a disciplined process characterised by the systematic synthesis of the Gutmann market assessment and client-specific influencing factors. It is only by the combination of these two components that an investment performance can be achieved that meets the client’s needs.

For more information please contact our Gutmann Private Banking relationship managers.