European Pensions & Investments Summit 2019

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  • Clariden Leu Ltd: Building a Portfolio of Uncorrelated Assets


    Stephan Meier from Clariden Leu Ltd, a private bank sponsoring the marcus evans European Pensions & Investments Summit 2011, on why and how to build a portfolio of uncorrelated assets.

    Interview with: Stephan Meier, Head - Asset Management, Clariden Leu Ltd


    Build a portfolio of assets that are not well correlated, advises Stephan Meier, Head - Asset Management, Clariden Leu Ltd. Investors need to find sources of return that diversify wealth and adopt diversification strategies whichever assets they invest in. From a private bank attending the marcus evans European Pensions & Investments Summit 2011, taking place in Montreux, Switzerland, 16 - 18 May, Meier highlights the benefits of risk diversification and which asset classes offer attractive opportunities to do so.

    What did pension funds learn from the global economic crisis?

    Stephan Meier: Many pension funds have had to de-risk their portfolios at the bottom of the market, resulting in a funding gap. They missed the equity market recovery because of their lower risk-taking capacity, and they now have a disproportionate holding in bonds, especially in government bonds, and very little invested in equities.

    Which assets do you think will perform particularly well in the next few years?

    Stephan Meier: Equities will do better than bonds; bonds are at record low yields. Taking a medium-term view, I would argue that it will be very difficult for bond yields to make positive returns in a five-year horizon. If you look at 10-year bond yields, let us say the Euro and the Dollar, with 2.5 to 3 per cent yields there is hardly any compensation for inflation. Investors have to explore emerging market bonds, as many emerging country fundamentals look very sound.

    Investors need to seek sources of return where risks are not correlated to equities or bonds. One such asset class is the insurance securities market. It is a strongly growing niche market, where returns are driven by assuming insurance risk. The driver of return is totally independent of the performance of financial markets. The return depends on what type of insurance risk we cover. We insure natural catastrophes such as hurricanes and earthquakes, but the trick in profiting from this asset class lies in diversification. Assuming hurricane risk sounds risky, but if investors do this on a diversified basis and do not put all their eggs in the same basket, they can generate good return premiums from different risks.

    Any final thoughts?

    Stephan Meier: Asset allocation strategies are clearly dependent on the risk profile of the client. Investing in convertibles is one very sensible alternative, as it means holding on to bonds and equities at the same time. If there is a good rally in the equity market, convertibles, if the portfolio is positioned and managed well, pick up between 70 and 80 per cent of the return that equities do. On the downside, they typically only lose between 20 to 30 per cent of the downside. It gives investors this asymmetric risk-return profile, which is attractive because it allows them to participate more on the upside of equities. This to me is a fairly interesting addition to any portfolio.

    It also makes sense to me for investors to build a portfolio which has favourable risk returns and parts that are not well correlated. Investors should find sources of return that diversify their wealth.

    Sarin Kouyoumdjian-Gurunlian
    Press Manager
    marcus evans, Summits Division
    Tel: + 357 22 849 313

    About the European Pensions & Investments Summit 2011

    This unique forum will take place at the Fairmont Le Montreux Palace, Montreux, Switzerland, 16 – 18 May 2011. Offering much more than any conference, exhibition or trade show, this exclusive meeting will bring together esteemed industry thought leaders and solution providers to a highly focused and interactive networking event. The summit includes presentations on dynamic asset allocation, risk management frameworks, European pension and financial market reform, and new portfolio models.

    For more information please send an email to or visit the event website at

    marcus evans group - investment sector portal

    Please note that the summit is a closed business event and the number of participants strictly limited.

    About marcus evans Summits

    marcus evans Summits are high level business forums for the world’s leading decision-makers to meet, learn and discuss strategies and solutions. Held at exclusive locations around the world, these events provide attendees with a unique opportunity to individually tailor their schedules of keynote presentations, think tanks, seminars and one-to-one business meetings. For more information, please visit 

    About Clariden Leu Ltd.

    Clariden Leu Ltd. is a Swiss private bank with roots dating back to 1755. It provides private banking and asset management services worldwide. Clariden Leu is one of the five largest providers of private banking services in Switzerland with assets under management of CHF 97 billion as of September 30, 2010. Clariden Leu Asset Management manages investments across the spectrum, from money market and fixed-income to equity and alternative investment products. Assets under management as of September 30, 2010 were CHF 19 billion.

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