Methodology

Asset management
Methodology

The methodology of CEFISA starts from a single often-neglected but undeniable fact: 80% of investors spend most of their time in analysing a security or asset whatsoever (the fundamental approach), yet 80% of the risk inherent in that security or asset stems from the market and its corresponding asset class.

Consequently we prefer a process which allows us to better actively manage the systematic risk engendered by the behaviour of markets and the various asset classes. Our approach is based on a specific model based on the concept of relative strength.

The thrust of the concept of relative strength is by investing in securities or asset classes that have, over time, superior performance compared to an asset class, an index or a given group of securities.

Once the analysis of the market and the choice of “strong” asset classes have been carried out, it is then much easier to select underlying securities belonging to the asset classes chosen by our model – namely a strong underlying asset in a strong asset class.

In this context, the choice of exchange traded funds (ETF) can be considered as the most relevant. These vehicles – which replicate such indices as equities, bonds, commodities, precious metals, real estate – enable us in effect to invest at the lowest cost and in a particularly efficacious manner over the whole range of asset classes and markets.

This method, which puts in perspective the weight of the fundamental analysis commonly adopted by the financial world, guarantees both a higher level of objectivity in respect of investment decisions and a regular adaptation to different market situations.


Contents
Philosophy
Asset allocation