Principal Global Investors (PGI) has expanded its fund business in Austria and makes five of its investment solutions available to Austrian investors. The strategies invest in a broad range of asset classes that offer both attractive return opportunities and diversification potential: Small and mid-caps, emerging markets equities, real estate companies and REITs, as well as high yield bonds from developed and emerging markets.
US-based asset manager has been present in Germany since 2003 and now intends to enhance its profile in the Austrian market. This step complements on the product side the expansion of the team with the appointment of Frank Richter as managing director, country manager sales, Germany and Austria and Diana Sippel as director - Fund Distribution Germany & Austria.
The products that are now tradable comprise the following five strategies:
Origin Global Smaller Companies fund: This strategy invests globally in shares of small and medium-sized companies with a market capitalisation of between $250m and $5bn. It aims to offer investors both attractive return potential and a good diversification opportunity in the global equity market. In order to ensure diversification within the portfolio as well, individual shares may normally have a maximum weighting of 2% at the time of purchase. Management lies with Origin Asset Management, an investment boutique and partner of Principal Global Investors.
Origin Global Emerging Markets fund: This fund provides investors with access to global emerging market equities. The investment universe includes companies with a market capitalization of at least $1bn. The focus is on technology stocks, commodity stocks and companies in the financial services sector. Asian emerging market equities currently account for more than half of the portfolio. China, in particular, accounts for 37.5% of the portfolio (as of 31 December 2018).
Global Property Securities fund: The fund invests worldwide in shares of REITs and other real estate companies. The strategy aims to exploit price inefficiencies in real estate markets, which are strongly shaped by local characteristics, in order to generate excess returns. Both fundamental aspects and quantitative research are incorporated into the investment process. The fund invests broadly diversified in various real estate segments - residential, office, retail and others. A regional focus of the allocation is the USA with currently 52% of the fund assets (as of 31 December 2018).
High Yield fund: This fund offers investors access to high-yield bonds issued in US dollars. It invests both in traditional high-yield bonds in the US and other regions of the world and in crossover bonds issued by Fallen Angels (investment grade bonds downgraded to high-yield status) and Rising Stars (former high-yield bonds upgraded to investment grade status). A special feature of the strategy is that management does not rely on external ratings. Instead, the specialised high-yield team produces independent, forward-looking assessments.
Post Global Limited Term High Yield fund: The fund aims to outperform US government bonds with maturities of 18 months. To this end, it invests in a portfolio of global short-term high-yield bonds with an expected average maturity between 12 and 24 months. Their volatility is generally lower than that of bonds with a longer maturity. The fund is managed by the Post Advisory Group, a partner company of Principal Global Investors. The investment process is primarily based on intensive credit research and a precise analysis of contract contents and the capital structure of issuers.
In addition, there are two strategies that have been available in Austria for some time: the Finisterre Unconstrained Emerging Markets Fixed Income fund and the Preferred Securities fund.