What Sets us apart
 


 

What Sets us apart

PERFORMANCE MEASURES

To be able to serve our clients in the best way possible, we select funds on quantitative and qualitative parameters. This is because past returns only can not grasp the difficult relation between risk and returns and therefore past returns only are insufficient when trying to assess a funds past and future performance.

In order to give a reliable assessment of a funds past performance and to be able to get a probable insight in a funds future performance, BMA Financial has developed a unique assessment system: the ‘BMA Advantage Fund Ranking System’. It takes not only past returns into account but incorporates other important factors such as risk, the fund's management quality etc.

We believe a fund will be able to serve the investor in the best way possible when all these parameters show the highest possible quality. BMA Financial regularly updates these scores and ranks the funds accordingly. Using the investors target return and risk appetite, BMA Financial picks the highest ranked funds for the investor. The BMA Advantage Fund Ranking System uses the following 12 parameters:

The BMA Advantage Fund Ranking System uses the following 12 parameters:

PERFORMANCE (RELATIVE RETURN)
Different types of funds give different types of returns: large but risky or small but stable. Performance of particular funds’ returns is therefore measured against a suitable benchmark.

STANDARD DEVIATION
A basic statistical number that reveals how ‘shaky’ the returns of a fund during a particular period have been. A large standard deviation means the fund has experienced large up and down movements which increase the risk for the investor of losing money at some point in time.

RISK
Measuring risk completes the evaluation of the risk-return principle.

We use VAR (Value at Risk) to determine the risk profile for all funds (except pure equity) which shows us how much money the investor at a maximum could lose in 95% of all cases.

For equity funds ‘Beta’ is used to determine risk. Beta shows the correlation of the fund to the stock market and is thus a good indicator how dependent ON the economic cycle.

FUND MANAGERS
The managers of the fund are making the investment decisions which determine future performance of a fund. Fund managers are being assessed on terms as education and work experience.

MANAGEMENT FEE
We believe it is important to consider the type of management fee charged by funds, including incentive structure given to fund managers to understand the type of risk – reward parameters the fund may operate in.

FUND SIZE
Since larger funds (as represented by higher Assets Under Management) should theoretically be more able to diversify their holdings across different sectors and/or asset classes fund size is a factor in assessing funds performances.

PORTFOLIO
Funds’ portfolios show large differences. One fund can be heavily invested in say the telecom sector, a second one might have a large part of its portfolio depending on the oil industry while a third fund tries to keep its investments spread out over many different sectors. The same counts for different financial products. We use the different portfolio compositions to be able to explain differences in past results as well as to incorporate our outlook for the future.

AMC RATING
The rating of the Asset Manager is a representation of management quality. We use ratings as awarded by Credit Rating Agencies - JCR VIS and PACRA.

FUND RANKING
These rankings are awarded for individual funds by JCR VIS and PACRA and are based on fund performance. We believe these to be a useful indicator of future fund performance.

INCEPTION DATE
Theoretically, older funds have a more developed and mature investment philosophy. This combined with availability of longer term history on performance and risk parameters allows for better estimation of future outlook. The learning curve for a fund is estimated to be 5 years.
PORTFOLIO DURATION
Duration for income and money market funds signifies the average investment period. For income funds, this is ideally between 90 and 360 days while for money market funds it should be less than 90 days. A longer duration indicates that the fund manager is less flexible in making changes to his portfolio in the short term.

 (Not applicable to equity funds)
CREDIT QUALITY
Credit quality of the portfolio held by individual funds is not usually ranked by ratings agencies. We feel it is important to consider asset credit quality as it has a direct bearing on future performance and return.

 (Not applicable to equity funds)