INVESTMENT PROCESS
Investment Value is at the core of Colchester's investment process. It is the synthesis of "Real Value" and "Financial Stability" assessed across countries, currencies, sectors, duration and maturity. Real Value is captured by our estimates of the expected real yield - the real return after subtracting the impact of expected inflation from nominal yields. This is underpinned by a robust inflation forecasting framework based on time proven, quantitatively oriented methodologies and the judgment of our experienced investment team. The determinants of Financial Stability - economic deficits and surpluses, monetary conditions and policy objectives - are appraised via a combination of rigorous analytical methods and experienced judgment. This methodology provides an integrated framework within which all fixed income assets we invest in can be appraised on a consistent basis.
Currency management primarily serves to preserve the value found in country bond markets. We believe that from time to time, excellent return-enhancing currency opportunities can be identified by looking for extremes in the value of real exchange rates. Therefore, real exchange rates are the main focus of the firm's currency research efforts, supplemented by current account and fiscal balance analysis.
Our Strategy
