Since inception the fund's investment philosophy has been characterized by the following:
- Protection of investors’ interests through effective corporate governance, checks and balances;
- Exclusive focus on achieving absolute performance while controlling risk: growth of assets comes second;
- Judgmental investment style combined with effective quantitative proprietary tools;
- A medium-term global macro view of economic, political and financial trends generating proactive and timely sector allocations;
- Flexible use of leverage, dependent on strength of convictions and proprietary risk analysis;
- Selection of funds within the global macro-view and risk committee framework; emphasis on funds with history, limited leverage, independence and with strong risk management and governance standards.
Harmony’s investment process requires that the investment and risk management functions are independent. Risk management operates independently but in complete synchronization with the investment side. Monthly investment and risk proposals are decided upon collectively by the firm’s senior officers.
Portfolio Construction Guide Lines
(as of April 2008)
Portfolio
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•First block to be built/rebuilt before any investments in other sections
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Maximum portfolio volatility: 3% pa
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Maximum portfolio drawdown: -1.5%
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Expected performance: 8-10%
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10-15 funds, each max 4% of NAV
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Target funds
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Portfolio
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•10 funds, each max 4% of NAV
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Second block to be built
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Maximum portfolio volatility: 5% pa
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Maximum portfolio drawdown: -4%
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Expected portfolio performance: 10-15%
Target Funds
• •
Portfolio
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•Tactical allocation on a theme-led selcetion (oil, natural resources, EM decoupling, yield-curve, banking crisis, commodities, S&P short, etc.)
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5-10 funds, each max 2% of NAV
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Low correlation amongst them
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Maximum volatility: 12%
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Maximum drawdown: -7%
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Expected performance: >15%
•Target Funds
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