RPH Capital’s investment philosophy, process and strategy revolve around rising, converging and diverging real interest rates in the global sovereign fixed income marketplace. We focus our efforts on preserving wealth, protecting investor's purchasing power, and “real” growth of investment capital.
Our investment philosophy is to capture real value when diversifying from a single currency to a multi-currency environment by being focused investors in a simple, transparent and liquid strategy. Our process is to short those government bonds of countries offering negative or poor real yield value and buy the government bonds of countries that offer high real yield value. Finally, our investment strategy does not speculate on currency valuations, as the portfolios are managed against adverse movements to the reference currency to mitigate foreign exchange currency risk.
(Real yield = published nominal yield of a government bond - the country’s inflation rate)
RPH Capital has observed 5 forces emerging from within the global economy that will affect all investors in the years to come. These forces are:
1. Real inflation is higher than the official reported inflation rate.
2. All investors' costs of living is higher than the official reported inflation rate, and this divergence will continue to widen as official inflation statistics continue to be redefined.
3. The expansion of the global middle class by two (2) billion people by 2030 or hundreds of millions of people annually, will result in the consumption of commodities, consumerables and money at an exponential rate.
4. The weight of government debt from expanding government deficits will cause additional pressures for real interest rates to rise, as the competition for global capital intensifies.
5. Governments intervening through their central banks, printing money and increasing money supply dramatically has historically resulted in global inflationary pressures.
We limit those countries’ sovereign fixed income that we can invest in to BB+ or greater (defined by S&P Sovereign). This gives RPH Capital a universe of all G-20 countries, plus an additional 10+ other countries globally.