For Managed Accounts
- Discretionary Investment Style
- Target Yearly Return 28% Net of Fees
- Target Volatility 7.5%
- Investment Focus: Core 60-70% / Satellite 40-30%
- Investors can boost their risk profile by leveraging MDM’s core strategy
- Program capacity limited in order to protect return characteristics
- Client chooses Depository Bank/Regulated Broker
- Client chooses Base Currency
- Client decides whether to apply MDM’s core strategy or to boost its risk profile by leveraging it
- Client has continuous access to its account, while MDM provides a detailed Monthly Report
- Client pays an annual Management Fee + Performance Fee (High Water Mark)
- MDM does not receive any retrocession or other form of remuneration by the DepositoryBank/Broker
- Client invests in MDM Partners core-satellite strategy through – SaxoBank platform or Interactvice Brokers - TWS platform
- Single Contract or Multiply Contracts with any above
- Exploits MDM Partners excellence in terms of customer support, reporting, controlling, audit
- Daily NAV calculation
- Daily Liquidity
Troughout the Investment process
INEA Consulting has a Long-standing partnership with MDM in the exclusive domain of Assets Risk Management
- MDM & INEA employ a quantitative, proprietary model to generate daily trading instructions using two inputs: Price & Volatility
- Determines at what point a move into a ‘fat tail’ becomes statistically probable and at that point mandates a trade
- Uses volatility as a governor for risk – adding risk in low volatility environments and lowering risk in high volatility environments
- Controls risk on trade-by-trade and a portfolio basis to ensure client risk parameters are met
- Protect against downside risk
- Capture currency related portfolio gains
- Historical client added value ranges from 200 to 300 bps
- Reduction in volatility of 20-30%
- MDM provides on-demand consulting to grant its clients the best access to the financial markets.
- A stable and experienced team at your disposal, anytime, anywhere.
- MDM provides consulting solutions that are designed to you and your needs only.
- From a straight-forward exchange of views on the overall market to an evaluation on more sophisticated products you are looking into.
- MDM will provide suggestions that are aimed at your satisfaction. We do not need to get you to trade at any cost, we need to get you to profit with the least costs involved.
Core-Satellite – “All Weather” ™ powerful investment strategy
The core-satellite concept is a portfolio philosophy that combines the best of portfolio theory and a real-world market-tested approach. In essence, core-satellite is a common sense investment approach which combines the benefits of assets allocation – lower cost, broader diversification, tax efficient and lower volatility, with actively managed funds or other direct investments offering potential for outperformance.
Core-satellite brings greater discipline and stability to an investment portfolio by:
• Reducing reliance on ‘picking winners’ or chasing fund manager returns
• Providing greater portfolio diversification
• Potentially improving after-tax returns by taking maximum advantage of capital gains
• Reducing overall management and transaction costs
Core-Satellite builds on the fundamental importance of asset allocation
Core-satellite is an approach that recognises the fundamental importance of asset allocation for long-term portfolio results. Market timing and security selection may provide some short-term gains at times, however over the long term research studies have proven that asset allocation is far more important. Research in both Bulgaria and overseas has consistently concluded that asset allocation is by far the greatest determinant of portfolio outcomes. Security selection and market timing only have minor influence, particularly over the long term.
The Beauty of the Core/Satellite Approach
The core-satellite approach provides an opportunity to access the best of all worlds. Better-than-average performance, limited volatility and cost control all come together in a flexible package that can be designed specifically to cater to your needs.
What’s in your core?
Asset allocation, one of the most critical steps in investment planning, translates an investor’s wealth goals into a strategic blueprint. As the core of an investment strategy, it acts as the foundation upon which the rest of the investment process is based. Astrong core captures a range of diversifying opportunities – from traditional asset classes such as domestic equities and fixed income, to alternative asset classes. By building a base that includes a breadth of unique risk/return exposures, investors can push out their investment frontier, allowing for the opportunity to achieve greater return at a given risk level.
The choice between index and active is not based solely on performance, however. In fact, how much risk active risk in particular – is the primary factor to consider. Many investors view active managers as a means to reduce risk, perhaps leaning on a manager’s reputation or skill at avoiding down markets. In reality, active management brings additional risk to the overall portfolio. Why? In order to beat a benchmark index, active managers must take positionsthatmake them look different than that index. In reality, not all bets pay off every time – especially those that involve precisely timed market changes. And for every dollar that implements a successful bet, there must be a dollar that was spent on the opposite view – and was lost. The challenge is to find the best managers with the most successful and consistent insights that compensate investors for bearing that risk. If none can be found, then active risk is not worth taking.
One way to manage active risk and preserve your asset allocation model might be to use active investments that track their benchmark more closely. But that begs the question: why pay higher management fees for an active investment that attempts to mimic a benchmark? If there is a way to mitigate active risk and maintain the integrity of the asset allocation, then shouldn’t the higher fees go to active funds or managers that attempt to skillfully fulfill their mandate? Core/satellite investing resolves this dilemma.
Your guide to core/satellite investing.
Step 1: Begin with a strong “core” based on an asset allocation strategy
By closely mirroring asset class benchmarks bank deposits, index investments such as ETFs, CEF’s can help an investor stay broadly diversified, in line with their asset allocation, and on track to meet goals – all while lowering overall costs.
Step 2: Select “satellites” – either index or active investments
With the core established, seek extra return – or alpha – only where the risk trade off warrants it. Use individual securities, separately managed accounts, mutual funds – and even ETFs – as satellites. Customize the mix between index and active, asset class by asset class.