Aldo Tito Trinca
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Tito life, Asset Management & Financial Consulting
IMA High Yellow - How to connect with me >
IMA High Yellow. How to connect with me.
Be quick paced
with your praise
of my ideas
Investment process, VAM, behavioral finance, cinema, fundamental research, long-distance
race, Zurich, wining & dining, skiing, GIPS Global Investment Performance Standards,
connections, track record, golf, information ratio, performance goals, friends, swimming,
stock-picking strategies, Atlantic Ocean, lifestyle, benchmark, entrepreneur, New York, trust,
Bloomberg.com, Vienna, holiday, genius, pink of health, outperformance, world politics,
Talk is BRONZE, letter is SILVER, silence is GOLDEN. But hard work is flawless
Who am I ?
I was born in Zurich City (Zürich or, more familiarly, Züri), the largest city in Switzerland.
Nevertheless after graduating from Zurich's University, I moved nearby to Zurich City at
All my life I have focused on global asset allocation and asset management in five top asset
management companies from Zurich, Vienna, Milan, London and New York. I learned a good
deal about institutional and private banking asset management business worldwide, the
importance of teamwork and of hearing to other professional' s advice. The pressure belongs
to my nature. Nevertheless, I believe in planning, coordinating and good time management to
decline panic haste. Think globally, act locally. Problems have to be tackled instantly and
after appropriate discussion a decision has to be reached. My business sense developed to a
high standard, what produced an excellent performance track record since 1990. ZIM's and
Zurich Scudder Investments AG's information ratio and risk/return ratio was world-accepted
and much-valued. For many a long year I managed accompanied by two colleagues, with an
active asset management strategy, efficiently and widely diversified equity and balanced
portfolio amounts of billions Swiss franc (CHF), Euro (EUR) US Dollar (USD $), British
Pound (GBP £) and Japanese Yen (JPY) globally and mainly in favour of pension funds
respectively pension mandates and marginally (Ultra) High Net Worth Individuals HNWI.
My professional history as well as my expert knowledge
Member of the Swiss Financial Analysts Association SFAA, Head of International Equities,
Member of the Asset Allocation Committees, Member of Executive Management, Head
Pension Fund for Civil Servants of Canton Zurich, Switzerland, Senior Portfolio Manager /
Relationship Manager, Board member Free Democratic Party of Switzerland for a
municipality, lic.oec.publ., University of Zurich, Alumni ZUNIV, Alumni Finance Club
ZURICH SCUDDER INVESTMENTS AG, Zurich, Switzerland: "The Portfolio
Management produced an excellent performance track record and the Administration
although suffering from 100% staff turnover in one year kept the system running", Audit
Report, Internal Control & Organization Review,1997.
1 What does GLOBAL ASSET MANAGEMENT mean?
WHAT CAN I DO FOR YOU ? What can I offer you?
I feel confident you have conflicting goals (IR) concerning gaps in occupational pension.
Is it really true? May I help you?
ASSET MANAGEMENT STRATEGY - Organized Stock Markets Worldwide
Stock Exchanges globally
Bloomberg Europe ........ Swissquote ........ CNBS ........ CNN ........ Bloomberg ASIA ........
China Stock Market
Regular income from your investments - less concerned with size of your capital?
Preserve your wealth? Avoiding risks? A conservative investment strategy characterized by a
desire to avoid risk of loss.
Accumulate or build up your wealth - taking more risks? Shares have better profit potential
than bonds, but are also more volatile - their value can increase or decrease more in a short
period of time. At that time it's not for the faint-hearted. A pessimist sees difficulty in every
opportunity, an optimist sees opportunity in every difficulty.
Active strategy - buying and selling frequently, adapting the portfolio to changing market
Passive strategy - buying and holding securities, leaving the position unchanged for a long
time. Nowadays there are lots of index-linked funds which simply try to track or follow the
movements of a stock market index.
Value investors are strictly concerned with the here and now; they look for stocks that, at this
moment, are trading for less than their apparent worth.
Growth investors, on the other hand, focus on the future potential of a company, with much
less emphasis on its present price.
Behavioral finance - Some central issues in behavioural finance are why investors and
managers make systematic errors. It shows how those errors affect prices and returns (creating
market inefficiencies). It shows also what managers of firms or other institutions, as well as
other financial players might do to take advantage of market inefficiencies.
Going deeper ... and deeper ... and understand your RETIREMENT AGE, the point where
you stop employment completely ...
Portfolio Investment Management
Main key success factor
D I S C I P L I N E
• I follow an active investment approach
• I am committed to a systematic, structured and risk controlled investment process
• I identify attractive investment opportunities requiring balancing growth prospects against
• I believe in a disciplined portfolio construction which transfers investment decisions into
superior risk adjusted alpha
• I follow an effective cross-border cooperation with analysts and co-worker across
regions and asset classes to add value to the over-all investment management
• I reveal that the core investment style can be best described with GARP (Growth at
Reasonable Price) or VARG (Value at Reasonable Growth).
Tito life, Asset Management & Financial Consulting - European Equity Mandate and
Global Balanced Portfolio Mandate
• Bottom up within a framework of economic expectations
• No bias towards market capitalization (small vs. large), investment style (value vs growth
and momentum) nor geographic expansion (local vs. global)
• Global themes --> one European economy and stock market
• Disciplined investment process with integrated risk management
I am an active portfolio manager exploiting the inefficiencies of the capital markets in a
• Identifying investment themes, markets and securities with above average potential
• Asset prices fluctuate more than the economic fundamentals that determine the basis for
capital market valuation
• Such fluctuations create investment risk and variable valuations which, when properly
analysed, provide opportunities for enhanced investment returns
• Capital markets follow long term cyclical pattern providing opportunities to outperform
• Effective and active risk control is a strong determinant of long term returns
• Stocks of companies with long term sustained earnings and above average earnings
growth are rewarded with above average returns
Investment Allocation Process
Indicators are as follows:
• Economic liquidity (Monetary policy)
• Financial liquidity
• Legal requirements (if Pension in Switzerland, UK and other OECD countries)
• Transparent and controllable
• Investment decisions are structured and based on long-term expectation
• Asset selection is important and investment styles are adapted to local markets
• Bottom up security analysis conducted within a framework of economic expectations -->
top down analysis --> by themes and sectors
• Economy and market rankings only influence country allocations
• Qualitative judgment supports portfolio construction and risk control
• The investment process is disciplined and applied in a consistent manner
• The investment risks are continuously identified and carefully monitored as I focus on
• Focus list
Growth for value at the right price --> large, small, mid caps and momentum --> across
investment styles --> Alpha list
• Fundamental research --> sector allocation / stock selection
• Excellent management
• Dominant market shares, leader
• Apply various valuation models
R E M E M B E R, ....... success ...... =>
=> ... is 10% I N S P I R A T I O N and 90% T R A N S P I R A T I O N ...
Introducing the Global Industry Classification Standard
As the world's leading provider of global indices and benchmark-related products and
services, Morgan Stanley Capital International (MSCI), in collaboration with Standard &
Poor's (S&P), introduces the Global Industry Classification Standard. This Global Industry
Classification Standard aims at easing the investment research and asset management process
for financial professionals worldwide. It is the result of numerous discussions with asset
owners, asset managers and investment analysts around the world and is designed to respond
to the global financial community's need for an accurate, complete and standard industry
The Global Industry Classification Standard consists of 10 sectors, 24 industry groups, 67
industries and 147 sub-industries. Initially, the MSCI indices will be computed at the sector,
industry group and industry levels. The full structure of the classification is detailed in the last
section of this document.
Structure of the Global Industry Classification Standard
• consumer discretionary
• consumer staples
• health care
• information technology
• telecommunication services
The key features of the Global Industry Classification Standard are:
• Universal: the classification applies to companies globally
• Accurate: the structure accurately reflects the state of industries in the equity investment
• Flexible: for levels of analysis, ranging from the most general sector to the most specialized
• Evolutionary: annual reviews will be conducted to ensure that the classification remains
fully representative of the universe
I expect the Global Industry Classification Standard to be widely accepted as the best industry
analysis frame-work for investment research, portfolio management and asset allocation. Its
universal approach to industries worldwide will significantly contribute to transparency and
efficiency in the investment process. In addition, the current trend towards sector-based
investing will also greatly benefit from the Global Industry Classification Standard.
=> One of mine three written semester study papers dated 1984 „The New BVG: Selected
Problems of the Second Pillar in Switzerland" became examined, authorised and highly
qualified by Dr Mark Hauser, professor at the university of Zurich, Income Distribution and
2 What is an asset manager and what is an active asset management strategy?
Portfolio management is one of the last creative entrepreneurial frontiers: Portfolio managers
create and deliver investment performance.
1. Investment Objectives
Every portfolio/product should have a clearly defined performance objective versus a stable
peer group and/or a single benchmark.
2. Equity Philosophy
Every portfolio/product should have a well-defined, simple, concise investment philosophy,
backed by evidence that the philosophy works over time. This investment philosophy is the
foundation of the portfolio construction process.
3. Portfolio Construction Process
Every portfolio/fund/product must have a clear, disciplined process through which the
philosophy is implemented, with evidence that the process reflects the philosophy and, in
turn, the portfolio construction reflects the process.
The key parts of the process include universe definition, stock selection disciplines, and risk
management disciplines. A key check of whether the process is rigorous enough is to be able
to attribute performance, either conceptually or quantitatively, to the various steps of the
portfolio decision making process. If the parts of the process cannot be broken up into pieces
and their contribution assessed, the process needs work.
Effective use of my own/colleagues research is one of the most important element which can
distinguish me from the competition. The onus lies on portfolio managers' shoulders as well
- A portfolio manager is responsible for communicating clearly and regularly his investment
goals, discipline, and portfolio structure.
- A portfolio manager needs to be able to talk the "language" of research, including financial
statements, competitive strategies and critical assumptions.
- A portfolio manager must articulate and prioritize his requirement and define and articulate
fundamental investment criteria that are relevant to the portfolio process.
- A portfolio manager must be willing to roll up his portfolio sleeves and work with research,
reinforcing research best practices and engaging analysts in an in-depth investigation, so that
when buy and sell decisions are made, they are made jointly, as a team.
- In order for a portfolio manager to have the time to work with research and focus on the
stocks in his portfolio, it is necessary to edit out the irrelevant data smog. We live in a world
of excess information. I, not the Swiss Stock Market, need to set the agenda, defining the
questions, developing the hypothesis to test.
- Research will only be as good as a portfolio manager makes it; and the reverse is true as
5. Risk Management
Top quartile performance entails both the pursuit of opportunity as well as a consistent
strategy for managing risk.
A portfolio manager must understand the difference between company specific risk and
systematic risk and the methods to monitor and manage both. The portfolio manager needs to
analyse portfolios for facets of risk that can't be quantified. Key to successful portfolio
management is understanding what you are good at and focusing on it, while neutralizing that
which is not your forte. In risk management terms, the area of strength will be managed
through explicit stock selection techniques; the area of weakness will be managed through
explicit risk control techniques.
Every portfolio manager must be able to construct a portfolio well, implementing value added
stock selection and risk management disciplines.
Good implementation includes a variety of best practices. While different product definitions
may dictate unique implementation practices, the following generalizations apply to most
- Portfolio managers who take a longer time horizon and have lower turnover can generate
higher performance than those who don't. The reason for this include: Fundamental research
is best able to identify opportunity over a longer not shorter time horizon; few people have
enough good ideas to justify high turnover; transaction costs are high.
- Portfolio managers who work with the trading desk to manage trading costs down can
generate higher performance. Communicating with the desk continuously and letting the desk
do its job are key.
- Portfolio managers are responsible for the error-free implementation of all portfolio
- Portfolio managers need to determine the appropriate number of securities in a portfolio
based on the way value is added through stock selection and risk management. The greater the
emphasis placed on stock selection, the fewer the number of securities.
The portfolio manager needs to monitor and report performance in a consistent and credible
framework, using the value chain.
While clients frequently like to hear about macro events, the overall market environment, or
individual stock stories, portfolio managers need to understand and articulate the construction
of each step in the portfolio management process and of the strategies that knit then together
in a whole. It is only through the understanding of what aspect of the process added or
detracted from performance that appropriate action steps can be taken.
3 History and explanations
If we compare funds / mandates performance to market performance (indexes), we speak
about an outperforming fund / mandate versus a neutral or last but not least an
underperforming fund / mandate.
Differentiate --> Definition!
Outperformance: well-defined, as a better result than an index --> the relative positive case:
the Dow Jones Industrial Average Index (DJIA) gained, say, within a year: + 12% p.a. --> an
active managed portfolio gained within the same period: + 15% p.a., --> resulted in an
outperformance --> 15% - 12% = 3% --> the active managed portfolio outperformed the
market (DJIA) by 3% within a year !! --> far outperforming the index --> well done!
Underperfrormance: well-defined, as a poorer result than the index --> the relative negative
case: Dow Jones Industrial Average (DJIA), say gained again within a year: + 15% p.a. --> an
active managed portfolio gained within the same period only + 11% p.a. --> resulted in an
underperformance --> 11% - 15% = - 4% p.a. --> the active managed portfolio
underperformed the market (DJIA) by 4% within a year !! --> a relative performance lose -->
an underperformance, although it was a success --> you gained 11% return but less than the
market index offert, namely 15% p.a. --> far underperforming the index --> badly done!
Conclusion: Worldwide, only 20% of all active managed funds and portfolio mandates
outperform the market but the asset management market asks for multi-year "fat years", not
just for one!!!!! Personally I am a remarkable outperformer for the most part of my existing
asset management history. I never joke about my work. I gave my all. I put together a strong
asset management team what resulted in a tremendous outperformance over ten years'
Profound knowledge of life and pension- and funds industry, asset allocation, strategic,
tactical over all asset classes, track record, information ratio (IR > 0.5 --> excellent result),
Jensens's Alpha, tracking error (TE), Optimation: IR = Alpha : TE, beta coefficient, treynor
ratio, sharpe ratio, value/growth, large/small cap, momentum, outperformance, Modern
portfolio theory, Swiss Performance Presentation Standards (SPPS), Global Investment
Performance Standards (GIPS), Global Industry Classification
Standard (GICS®), performance measurement, performance attribution (EIPC - Guidance on
Performance Attribution Presentation), performance appraisal, efficient market hypothesis,
discounted cash flow (DCF) analysis, MSCI Barra, extensive national and international asset
management experience for private banking, institutional investors, funds, retirement funds,
ultra high net worth individuals UHNWI, fundamental research, stock-picking strategies,
actively managed asset-allocation funds, membership of the asset allocation committee,
acquisition and retention of private and institutional investors, organise and hold seminars and
events, search, selection and monitoring of external portfolio manager, alternative investment
strategies, ETF Exchange-traded funds, Hedge Funds, Avaloq Banking System, SimCorp
Dimension - Investment Management
I'm delighted to be part of this wonderful relationship. Thank you for stopping by and visiting
my profile! I look forward to connecting with you. If you have any questions please feel free
to drop me a line. But there's no harm if you practically nothing find. A nice connection is
worth much more than anything else. Thank you.
Aldo Tito Trinca