INVESTMENT PROCESS

Overview

The Investment process begins with a thorough understanding of each client’s individual situation. We look at a client’s need for growth and income, their risk tolerance, and their tax situation. Only then are we able to determine the appropriate asset allocation- the mix of stocks and bonds in the portfolio.

Screening Process
MBA Capital Limited team of portfolio managers and analysts in Hong kong continually research stocks that fit our stringent criteria. We start with the universe of companies with $2 billion or more in market capitalization. We then do a quantitative screen for companies with the best growth characteristics and those whose price is below what we calculate to be fair value. We then do a qualitative screen to assess the management, strategy and growth prospects of these companies.

Model Portfolio
The process results in a “model portfolio” that is comprised of 35-40 stocks. Statistics show that this allows for ample diversification and reasonable ability to grow the portfolio. This model portfolio is the basis for the equity portion of a client portfolio. We also maintain an “approved list” of stocks. These stocks satisfy our quality, growth and valuation criteria and allow portfolio managers to customize the client’s portfolio.

Ongoing Monitoring
We continually monitor the companies we follow, staying abreast of any significant changes that could affect the ability of the stock to reach its price targets.

Our Investment Strategy And Management MBA Capital offers an advisory investment management service to our clients. This means that any initial investment strategy or changes to your portfolio are always agreed with you before we implement the planning.

We follow a four part process:

Risk Profiling – with any investment portfolio it is important to manage it at the level of risk our clients are willing to take. Your Financial Planner will help you complete a risk profiling questionnaire which provides our investment specialists with a starting point in identifying the level of risk for your investment strategy.

Portfolio Construction (risk management) – our investment specialists will choose the appropriate asset classes for your investment strategy based on the agreed level of risk. For example, if you only want a low level of risk then more of your portfolio will be held in assets such as government gilts, corporate bonds or commercial property. If you are willing to accept a higher level of risk then more of your portfolio will be held in equities including overseas equities or smaller company equities.

Fund Selection – once your asset allocation has been determined we will look at selecting the funds for you to invest. Time and time again we come across investments where they are just invested in one fund or invested with one investment team. Our portfolios typically consist of between 15 – 20 funds to help with risk management and because investment houses have never been and will never be experts in all areas. Therefore, we select the better investment managers and teams to manage different components of your portfolio. We review over 3,200 funds every quarter where we analyse different risk metrics, consistency of returns and the fund teams and investment managers who make up the funds. From the funds we review, there are usually only 300 that meet our selection criteria. We points score the final 300 which helps when constructing your final investment strategy. 

Review – the most important part of any successful investment strategy is ensuring that it is regular reviewed. At MBA Capital Limited we hold a quarterly investment committee where we review over 3,200 funds. We then construct our fund shortlist of approximately 300 funds. Finally, using this shortlist and the asset allocation data that we buy in, we review all of our portfolios.
We write to our “Wealth clients” on a quarterly basis confirming whether any changes should be made and asking for their permission to implement these changes.
We are one of the Hong Kong’s top asset and wealth management firms, if you would like to discuss our wealth management or investment management in more detail contact a member of MBA Capital Limited team in Hong Kong i who will be happy to assist you