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We set great store by the verifiability of our performance. That's why we stress performance measurement - in other words, the measurement, analysis and monitoring of
performance - to such a great extent.
Performance measurement on the basis of recognised standards
Standardised methods and consistent data form the basis of any fair and efficient performance measurement system. The Global Investment Presentation Standards (GIPS) have been
developed with this objective in mind. They regulate, among other things, the construction and maintenance of composites and benchmarks, the calculation of yields and the
presentation of performance. The Vontobel Group uses these standards. Since 2001 Vontobel Asset Management & Investment Funds has been certified in line with the Swiss
Performance Presentation Standards (SPPS), which are the Swiss version of GIPS.
Investment performance in relation to risk
Investment performance must always be judged in relation to risk. The Sharpe Ratio is used as a measure of risk-adjusted performance. If the client defines the strategic asset
allocation by means of a benchmark, the so-called Information Ratio is used. This ratio indicates how much extra return was generated for the increase in risk (tracking error). We
regularly report these figures.
Matching returns against success factors
The basis of any performance analysis is to identify the success factors underlying the returns achieved. In this way the performance of a balanced mandate can be seen as the
result of the combination of an allocation effect and a selection effect. The allocation effect measures the performance contribution which results from the tactical
over/underweighting of investment classes and regions against the strategic asset allocation. The selection effect represents the performance contribution from the composition of
the segments at individual security level, as compared with the model portfolios. In the equities segment the selection effect therefore measures the stock-picking skills of the
Portfolio Manager.
Performance analysis across the entire investment process
Performance analysis - which also forms the basis for assessing the performance of the Portfolio Managers - does not relate exclusively to the investment return
achieved. Instead it looks at the entire investment process. All of the process steps - from the investment policy at Group level to the efficiency of individual model
portfolios - are periodically monitored and assessed.
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