DCP Client Partner: The specialists for income-oriented strategies

Active managers specifically try to beat the general market. To achieve this, they have to make active bets and overweight or underweight certain securities. This, in turn, can be approached in very different ways, either by focusing on fundamental analysis by analysts or by developing a systematic, rule-based methodology. However, a combination of the two approaches is also often found. In our series, we highlight selected active managers. DCP Client Partner AG belongs to the category of fundamental active managers, but due to their specialization, they can also draw on a sophisticated methodology.

The philosophy of DCP Client Partner AG

The DCP Client Partner team combines qualifications and passion for professional asset management. The focus is on income-oriented strategies that offer clients stable and reliable returns. The asset manager ensures long-term growth - with an approach that combines know-how, innovation and responsibility.

Two main investment approaches are used: hybrid bonds and equity option strategies.

Income through hybrid bonds

The aim of investing in hybrid bonds is to achieve a higher return than traditional corporate bonds. The focus is on defensive quality issuers and short interest rate risks in order to optimize the risk/return profile.

Hybrid bonds usually pay a significantly higher coupon than normal corporate bonds because they are subordinated to traditional senior bonds. This compensates investors for the higher default risk in the event of bankruptcy.

For the issuing company, hybrid bonds can be partially counted as equity (e.g. for accounting purposes such as IFRS or rating agencies or banking supervision). Many hybrids are "perpetual" (no fixed final maturity) and can only be called by the issuer on certain dates (call dates).

For institutional and experienced private investors, hybrid bonds can help to diversify the portfolio between pure bonds and equities. The defensive quality focus of the DCP strategy minimizes the additional subordinated risk of hybrid bonds. DCP uses a unique internal bond scoring model to identify exciting risk/return opportunities.

"The so-called bank cocos (contingent convertibles, AT1 bonds, example Credit Suisse) are excluded from the investment universe of DCP Client Partners," says Sascha Peier, Head of Fixed Income and Senior Portfolio Manager.

Income through equity option strategies

Here, active investments are made in individual stocks from the USA and Europe and options are used to generate additional income - both on individual stocks and on well-known indices such as the S&P 500, the Euro Stoxx 50 or the SMI. This strategy is also known as the "covered call" strategy.

The investment focus is on index heavyweights and leading companies. In-depth fundamental analysis includes quantitative and qualitative analysis of key balance sheet figures as well as meetings with management and attendance at investor conferences.

The DCP Equity Income strategy seeks to generate current income from three main sources:

• Dividends from equities
• Option premiums from option writer transactions (this income is normally tax-free)
• Price gains through targeted stock selection

High flexibility in implementation

Implementation takes place either through own funds or via discretionary mandates. The two strategies, hybrid bonds and equity option strategies, can also be ideally combined.

DCP Client Partner serves both institutional and private clients with its approach.

DCP Client Partner AG and ZWEI Wealth

The cooperation between ZWEI Wealth and DCP Client Partner goes back more than 5 years. The management of the two companies regularly exchange information and jointly look after clients. DCP's ZWEI Wealth Provider Rating of 3.7 is very good and reflects the experience, good governance and above all the high specialization of the asset manager.

DCP Client Partner is also committed to transparency and maintains more than 10 standing offers in various risk profiles (Income, Yield & Growth) on the platform.

DCP Client Partner's offerings are also available in a package with selected integrated custodian banks, with many advantages for clients.

The question of "active or passive" cannot be answered in general terms. A structured combination of both approaches, tailored to the market segment, investment objective and risk profile, leads to better results in the long term. The decisive factors are transparency, cost awareness and consistent quality control of the providers used.