The AZ Sestante Investment Committee determines the investment strategy and objectives of the Sestante Diversified Fund based on client requirements and provides significant input over time to ensure that these objectives are achieved.
Step 1 - Portfolio Objectives
Step 2 - Strategic and Tactical Asset Allocation
The Target Asset Allocation is provided by Azimut. The SAA/TAA process is based on the Black-Litterman model. This sophisticated model produces a set of expected returns within a mean variance optimisation framework. The model takes into consideration the correlations and volatility of all pre-defined asset classes within an equal risk contribution framework to create an optimally diversified portfolio. The model can incorporate long-term, short-term and forward-looking macro signals.
Step 3 - Manager Research, Selection and Configuration
The underlying manager research and selection process is based on rigorous quantitative and qualitative analysis of the Morningstar available fund universe. The preferred list of managers is collectively approved by the AZ Sestante IC based on agreed factors. Azimut performs the underlying manager optimisation per asset class and advises optimal weights for each manager within the current SAA/TAA framework of the Fund. The Investment Committee ratifies the final allocations via majority vote.
Step 4 - Portfolio Implementation
Ironbark conducts further due diligence on the recommended investments by the AZ Sestante IC from a compliance, liquidity and ratings perspective and ensures that the proposed manager allocations are within the Investment guidelines of the Fund before modelling and implementing the recommendations.
Step 5 - Ongoing Maintenance and Due Diligence
Ironbark is responsible for the daily cash flow management of the Fund and provides ongoing portfolio monitoring to ensure that the portfolio exposures are within the recommended Target Asset Allocations and the portfolio adheres to investment management guidelines at all times. Ironbark oversees all aspects of the Fund in terms of valuation, unit pricing, performance and compliance perspective.