Risk management is a fundamental component of BONUS’s investment process. Only risks that are consciously taken or avoided can ensure long-term investment success. This requires constant monitoring of the capital markets and a timely response to new developments.
The BONUS Pension Fund holds the status of a special credit institution and is therefore subject to the strict legal requirements of the Risk Management Regulation for Credit Institutions (RIMAV-KI). The risk strategy is designed to take advantage of market opportunities at all times while ensuring the long-term preservation of the capital entrusted to it by its clients.
Going beyond statutory standards, the Risk Management department continuously works to further develop risk and stress testing models in order to establish an optimal basis for making informed investment decisions. Portfolio management activities are carefully analyzed and reviewed for effectiveness.
Risk Management
As part of a long-term asset allocation strategy, we strive to achieve a balanced relationship between potential returns and the risk of loss. Risk communication and documentation play an important role in all phases of the risk management process. We use statistical methods to assess capital market trends and identify potential losses. Unnecessary and operational risks are minimized. Excessive investment risks are avoided through consistent management and monitoring. After all, our primary mission is to invest the assets under our fiduciary management prudently and strategically—and to ensure an optimal risk-return profile.
Internationally standardized and meaningful metrics are used to analyze, assess, and manage financial risks. Loss risks are recalculated daily based on volatility and Value-at-Risk (VaR) for individual investments as well as at the portfolio level. Risk concentration in individual securities or asset classes is analyzed using Component Value-at-Risk. Furthermore, backtesting is conducted regularly for the entire portfolio. This is intended to ensure that our risk models are adequately calibrated and deliver meaningful results. Additional stress tests ensure that even extreme market value losses are taken into account in the portfolio’s construction. BONUS obtains the underlying data daily from established market data providers or directly from the fund companies.
Effective risk management as part of portfolio management is only possible if early warning signals and limits are consistently monitored and adhered to. For example, clear investment limits are defined for riskier asset classes, such as stocks, which must not be exceeded. Precise thresholds have also been defined for risk metrics; if these thresholds are exceeded, measures must be taken immediately. At the same time, these limits must be set in such a way that market opportunities can be optimally exploited.