Investing with Moneyfarm means having a team of experts working behind the scenes to take care of your wealth. We understand that investors often focus mainly on investment choices and performance, but that’s just the tip of the iceberg of our activities.
Through discussions with our clients, we’ve realised that the functions and responsibilities of the Asset Allocation team are not always obvious. So let’s clarify what our Asset Allocation team does:
Daily trading: we ensure that your portfolio maintains its ideal structure every day
Different assets have varying returns and volatility. Over time, the relative weight of these assets may deviate from the original strategy, potentially altering the risk level in the portfolio. Our team executes buying and selling operations to ensure that your investment maintains a risk level consistent with your expectations.
Risk management: monitoring the past and present risk levels of portfolios
We regularly monitor the historical and current volatility levels of portfolios to ensure that allocations remain within the risk levels required by our investors at all times.
Risk management: preventing future scenarios
The Asset Allocation team continuously conducts scenario analyses and stress tests to understand how the portfolio would perform in adverse market situations. These analyses inform the Investment Committee, guiding them towards the right investment choices.
Instrument selection
Our team conducts a comprehensive mapping of the fund and ETF landscape to assess whether new, more effective or more efficient instruments are emerging. We stay in contact with instrument managers and meet them regularly to ensure that our clients’ savings are in the right place. Special mention goes to sustainable investments, where we incorporate ESG metrics into our evaluations alongside technical considerations.
Development of new tools for market analysis
Market analysis and monitoring are crucial for making the right investment decisions. Over the years, we have built an arsenal of software, algorithms and trading signals that allow for advanced market analysis. The same applies to the algorithms that aid us in portfolio construction, which are continuously updated to incorporate new insights from internal research, analysts and academia.
Communication with clients
We consider communicating investment choices with our clients an integral part of our work. Part of our time is dedicated to engaging with advisors who present the clients’ perspectives, and creating content and analysis to provide visibility into our work.
All these activities are crucial for portfolio construction and put us in the best position to generate and test investment ideas and hypotheses. The best of these ideas are presented to the Investment Committee, and once they pass qualitative and quantitative evaluations, they are implemented in the portfolios. We always strive to explain our decisions, and as always, our Advisory team is available to provide further insights when needed.
*As with all investing, financial instruments involve inherent risks, including loss of capital, market fluctuations and liquidity risk. Past performance is no guarantee of future results. It is important to consider your risk tolerance and investment objectives before proceeding.
