Acronmy Flashcards
MR CHIMP
Factors to consider when analysing the prospects for a company
Management
Retained profits
Competition within industry History (recent) of company Input costs Market growth prospects Products
POURS GRIDD
Reasons for holding money market instruments
Protection of monetary value Opportunities to invest in other assets Unexpected liabilities to meet Recently received cashflows Short-term liabilities to meet
General economic uncertainty Recession expected Interest rates expected to rise Depreciation of domestic currency expected Diversification
REPEAT CAFE
Principles underlying the legislation and regulation of institutional investment practices
Regular reporting Expert advice Performance measurement Explicit mandates Activism Transparency
Clear objectives
Appropriate benchmarks
Focus on asset allocation
Effective decision making and operations
SERVICE
Functions of a regulator
Setting sanctions
Enforcing regulations
Reviewing and influencing government policy
Vetting and registering firms and individuals
Investigating breaches
Checking management and conduct of providers
Educating consumers and the public
SICI FOR MICI
Provision of financial services Skill, care and diligence Integrity Customer assets Info about customers
Financial resources
Other influences
Relations with regulators
Market practice
Info for customers
Conflicts of interest
Internal organisation
SLAVE
Reporting on the use of derivatives
Sensitivity analysis
List of individual derivatives used
Additional explanations needed to ensure that fund’s exposure properly understood
Valuation of derivatives (at market value)
Exposure of portfolio to different asset classes (net of derivatives)
SOUNDER TRACTORS
Factors affecting investment strategy
Size of the assets (absolute / relative) Objectives Uncertainty of the liabilities Nature of the liabilities Diversification Existing portfolio Return (expected long-term)
Tax treatment of the assets / investor Restrictions – statutory / legal / voluntary Accrual of liabilities in the future Currency of the existing liabilities Term of the existing liabilities Other funds’ strategies (competition) Risk appetite Solvency and accounting requirements
SYSTEM T
Investment and risk characteristics of assets
Security (default and other risks)
Yield (real or nominal, running yield, expected return, compare with other assets)
Spread (volatility of market values, diversification)
Term
Expenses or Exchange rate
Marketability
Tax
C Sport
Cost of performance measurement
Short termism
Past performance is no guide to the future
Objetctives may differ or constraints
Risk levels may have been different
Timescales - Different timescales lead to different conculsions
