With the development of China’s economy, more and more Chinese people begin to accumulate wealth and look for professional investment managers to help them manage their assets. cam investments have sprung up in China to provide such services. However, how to choose a suitable and trustworthy cam investment company has become a major concern for many investors. This article will analyze the key factors to consider when selecting cam investments from the aspects of company background, team expertise, investment philosophy, risk control and fees.
Check the cam investment company’s background and history
When evaluating cam investments, the first thing to look at is their background information. This includes how long they have been in business, their registered capital, shareholder structure, qualification certificates, registered location, etc. Older companies with solid operational history and ample registered capital tend to be more stable. It’s better to choose firms located in first-tier cities with strict financial regulation. Also, check if the company has obtained necessary licenses such as Securities Investment Consulting License issued by Asset Management Association of China (AMAC). A transparent shareholding structure is preferable.
Examine the investment team’s expertise and experience
The capability of the investment team is crucial in determining the future performance. Check the portfolio managers’ educational background such as degrees from top universities and professional qualifications like CFA. More importantly, inspect their practical investment experience in securities, assets allocation, risk management and familiarity with various products. Teams that have experienced multiple market cycles tend to make wiser decisions and control risks better.
Understand the cam investment company’s philosophy and process
Every cam investment company has its own philosophy and investment style. Some are aggressive while others more conservative. Some like to concentrate positions while others diversify. Some favor fundamental analysis and others technical analysis. investors need to find the one that matches own risk appetite and return target. Also check if the company has a standardized and rigorous investment procedure covering research, decision-making, execution and risk management.
Evaluate the risk control measures and past performance
In addition to examining investment capabilities, prudent investors should check the company’s risk management capabilities as preserving capital is equally important as making profits. Look at their risk control measures for individual products as well as the overall portfolio, especially maximum drawdown control. It’s also instructive to review actual performance of existing products to get a sense of risk and return profile. Consistent and risk-adjusted outperformance indicates strong investment and risk management skills.
Compare the fee levels and structures
cam investment companies earn fees from clients so they would prefer structures that generate more revenues. investors need to look for fee arrangements that align the manager’s interest with their own. Fixed fees like AUM-based charges are better than performance-based fees in terms of risk control. Also look out for hidden costs like commissions and spreads. Average fee rate of 1-2% on AUM is reasonable.
To find a suitable cam investment advisor, investors need to comprehensively assess their background, team expertise, philosophy, risk control and fees. Striking a balance between expected return and prudent risk management should be the key principle.