Read: A day as an investor by Wilfried Bolt

After studying Economics at Maastricht University, Wilfried Bolt (39) started his career at DSM in 2006. Following a period of managing equity and bond portfolios, he switched to the Rates & Inflation (R&I) team of PGGM Investments in 2010. Wilfried: ‘Our R&I team is responsible for managing the interest rate and inflation investment portfolios of our pension clients on a day-to- day basis. We invest in derivatives, government bonds and bonds. Finally, our team is responsible for the mortgage investments we offer to our clients.’

A regular day

On a regular day, the team analyses fixed income markets for macro-economic trends on growth, inflation as well as interest rates. New bonds are issued multiple times per week, which are evaluated for potential value in our portfolios. Wilfried says: ‘We monitor country-specific developments as well as developments within the developments banks we invest in. Issuance of green and social bonds become ever more prominent in our investment universe, and it is very useful to meet (virtually) in order to rightly assess these framework and how they align with the strategy of the issuer.’

‘Future-proof’ swapping and increasing standardization

While keeping track of developments in fixed income markets, Wilfried notices important trends in interest rate swaps and government bonds. He says: ‘Derivatives will increasingly less be executed as a bilateral trade, as a result of the global goal to potentially reduce systemic risk and move more strongly towards central clearing. This induces operational changes and extra costs. Together with our colleagues from Treasury and Trading, we make sure we execute every swap in the most ‘future-proof’ manner.’ For bonds Wilfried sees the advent of the EU Taxonomy and Green Bond Standard as a new golden standard, pushing forward the thematic bond market into a new era. Wilfried: ‘Increasingly science-based targets and standardization should help us investors feel comfortable that our investment actually contributes to European climate goals.’

Future challenges

On his outlook for the future, Wilfried mentions several challenges that he and his colleagues will be facing. Wilfried: ‘The pension reform will probably change a lot on how we look at interest rate hedging and portfolios for pension clients, this is a very important topic for our portfolios over the upcoming years. Inflation, will this be transitory, and resume on the old path we have seen for decades or is there a paradigm shift going on? With great effects on interest rates and monetary stimulus disappearing from central banks, what will be the effect on spreads for the less safe eurozone countries? And will the massive growth in green and social bonds continue progressing with the arrival of the EU Taxonomy and Green Bond Standard, or will this high hurdle actually hinder new issuance?’