Van de Ven has halved his allocation to bonds for a typical client from 50% to 20-30%. “And if we invest in bonds at all, we invest in bonds that can give a return, like high yield bonds.
Instead he allocate more to equities. “If you compare bond investment with defensive equity investment, you have a big chance to make more with your equity investment,” he told Expert Investor Europe.
Investing more in equities inevitably means your portfolios are exposed to higher volatility. But Van de Ven doesn’t believe that makes his investments more risky. “Risk is typically defined as volatility. But for us, risk is rather the possibility of a total loss of a certain investment,” he says.
For Van de Ven, volatility is the price to pay to for a better return on the longer term. “Our clients are typically long-term investors, so they can bear a little bit more volatility to get a higher return.”
In part two of this interview, Van de Ven talks about his dislike of absolute return funds.