There are several factors on how we choose which ETFs are eligible to be used for our plans then apply different set of technics to measure which ones become possible options for investments. We normally break this down in 3 parts:
Stage 1: Picking only the best ETFs
In this stage our team will put several factors which make us put an ETF in our list for investments. The most important factors are:
1. Issuer Reputation. We only use the best issuers in the world like Blackrock, Vanguard, Pimco, JP Morgan, Franklin Templeton and many others.
2. Track Record. We only choose strategies with good track record. We need to be sure that the managers of the strategy have a good track record. We might consider new strategies from experienced managers with lower allocations if they provide something unique.
3. Assets under Management. We will not consider strategies with low assets under management as we always want our ETFs to be easily tradeable.
4. 90 day rolling Volume. We will not consider ETFs with low volumes as this would increase the risk of higher spreads in case of rebalancing.
Stage 2: The strategy approach
In this stage we will generally separate the ETFs based on their investment mix and geographical exposure. Strategy means if they have exposure in stocks or bonds and in which region as we always need to be well diversified not only in asset class but also in regions. We then have sets of ETFs which are measured against each other to find the best performers.
Stage 3: Building & Monitoring the portfolio
Based on the client’s risk and reward needs we will build his/her efficient frontier by trying to achieve the highest possible return for the pre-agreed level of risk. For this purpose we will use only the best ETFs and correct strategies which can achieve the expected result. We will of course monitor and rebalance when needed to protect the portfolio from unnecessary risks.
This document does not constitute and shall not be construed as a prospectus, advertisement, public offering, or placement of, nor a recommendation to buy, sell, hold or solicit, any investment, security, other financial instrument or other product or service. This document is for general information only and is not intended as investment advice or any other specific recommendation as to any particular course of action or inaction.