Portfolio Development
Investment goals are the starting point of all of our client relationships and are detailed in an investment policy statement. AMZCapital.com provides support assistance in creating a flexible investment policy statement that communicates all objectives, expectations, responsibilities and benchmarks to guide the client's investment process.
AMZCapital.com portfolio development services include completion of a confidential client profile and selection of an investment strategy that meets your financial goals, time horizon, and attitude toward investing. Based on identified objectives in the areas of preserving capital, maximizing income or realizing growth, we implement an investment strategy that is appropriate for you by structuring a diversified investment portfolio
Portfolio Development is an integral part of a full service consulting relationship. AMZCapital.com's portfolio development process starts with a comprehensive assessment of a client's objectives, preferences and constraints .
Once the information-gathering stage is complete, AMZCapital.com drafts a portfolio which addresses the following key elements:
| Purpose Statement | States purpose of the document. |
| Investment Goals and Objectives | States long-term fund objectives and describes how the portfolio will be managed to achieve those objectives. |
| Responsibilities | Identifies roles and responsibilities of all those involved in the investment process. |
| Identification of Key Constraints | Places boundaries on investment decision making. |
| Eligible Investments | Explicitly states the type of assets eligible for investment. |
| Asset Allocation/Liability Process | Identifies the portfolio structure that best meets the Fund's liabilities. |
| Portfolio Rebalancing Process | Identifies the frequency and process for rebalancing the portfolio to bring it in line with the stated target portfolio structure. |
| Risk Management Process | Identifies the process for monitoring and managing the risk structure of the portfolio. |
| Performance Benchmarks | Identifies both total fund and asset class specific benchmarks used to evaluate performance. |
| Performance Reporting Process | Identifies reporting requirements and the frequency of distribution. |
The investment system search and selection process can be broken down into related stages.
Stage I : Set Objectives
The search for investment system begins with the identification of the objectives, preferences and constraints associated with a particular search assignment. The objective might be to fulfill a mandate for small cap growth, large cap value, international emerging markets, market completion fund or any asset class, subclass or style.
Numerous preferences outlined by the client pertaining to the types of investment management firms and their qualifications, along with various constraints specific to the fund's policies or mandated by the regulatory environment, further define Stage I of the search process.
Stage II : Determine Scope
Stage II represents the initial screen in each search that identifies the potential candidates for inclusion in the formal search. These candidates are examined as to whether their inclusion in the client portfolio is appropriate given the overall structure of the plan.
This stage also includes practical issues such as how many systems are invited to respond to the inquiry and what time frame is appropriate. We also identify any special considerations at this point which would include or exclude a particular system.
Stage III : Qualitative Analysis
Stage III requires the development of a framework for evaluating the investment systems that meet the objectives, preferences, and constraints discussed in Stages I and II. The framework provides a disciplined approach to evaluating the qualitative information of each System. This evaluation process requires a subjective overlay which allows AMZCapital.com to apply it's expertise on the search process. Our evaluation process includes the following qualitative factors.
Employee ownership, ownership/management consistency, business focus on investment management, litigation, responsiveness, firm size and growth plan.
Size/depth of staff, experience, stability of investment management group, compensation package, analyst/portfolio manager stature.
Dedicated management group, current level of assets, internally developed diagnostics/tools, similar mandates, assignments gained/lost.
Clearly defined and achievable philosophy, consistently applied over time, risk/reward, appropriateness for client, purchase/sell discipline, risk control measures, portfolio characteristics, style consistency.
Stage IV : Quantitative Analysis
Stage IV includes what is usually considered to be the core of manager search and selection: quantitative review. AMZCapital.com evaluates several factors including:
Risk, return, risk-adjusted measures, benchmark analysis, universe comparisons, attribution analysis, cumulative performance for different time periods, consistency through varying markets.
Determine a manager's style through performance based attribution work.
A nalyze individual system and composite portfolio back-tested/simulated data.
Each of the qualitative and quantitative factors outlined above are assigned weights based on their relative importance. These weights are applied after consideration of the objectives, preferences and constraints discussed in Stage I.
Stage V : System Selection
During Stage V, AMZCapital.com selects the systems to be used with the client's portfolio. Once the top systems have been selected, a final approval is taken from the client.
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