Institutional Investors Managing Investment Portfolios. Tieu JD Ngao
Provide for joint standards for monitoring and evaluating the performance of the investment managers and the means (funds) investment in relation to the appropriate investment mold.
• Provide criteria for the selection, termination or change management / fund.
• Establish effective communication processes for fund managers, guardians, RPC and members of the plan participants.
The role and responsibilities of the RPC: RPC responsibility in the implementation of the investment policy, including:
• Monitor the fund's objectives and selection of certain funds to propose to provide plan members more likely to diversify.
• Monitoring the effectiveness of investment, including the cost of the proposed fund and plan members to terminate or change the investment fund as it feels right and appropriate.
• Ensure smooth communication, and appropriate training resources for plan members
• Select, monitor and, if necessary, propose changes in the Plan's guardian.
• Make sure that the interest rate of the debt plan in accordance with the provisions of the Plan.
Roles and responsibilities of participants: Responsibilities of the members of the plan include pumping the allocation of contributions and the accumulation of Planning in various funds and is responsible for training yourself to perform reasonable allocation of assets in the period in office or life.
Active asset allocation of a member is a function of many variables, including age, income, time before retirement, risk tolerance, cumulative target, target replacement pension income and other assets. To allow participants to create savings and investment strategies consistent with individual needs, plan offers many investment options with multiple profit targets and different risk characteristics.
The most appropriate location and plan members make individual decisions about how to allocate assets between investment options. Therefore, the orientation of the investment account to delay selection of employees and contributions by BMSR will be the responsibility of each member. Responsibility of each member is allocated assets in personal funds as the situation changes.
To support the above mentioned factors, BMSR will provide information to participants regarding the investment options and the basic principles of investing. However, the distribution of materials and the provision of alternative investments by BMSR not mean that the advice to participants.
Profit and risk are two fundamental concepts of investment activities. Over time, the alternative investments offer higher expected returns would indicate a greater level of risk (for example, the transformation of the profit or the initial value of the property). Plans to offer a variety of investment options other password in order to give participants the opportunity to to strategic choices profit / risk consistent with savings, their investment objectives and to perform multi- full diversification.
Application of ERISA 404 (c): BMSR intend to apply the provisions of Section 404 (c) of ERISA, by (in different ways), making a huge investment choice and diversity; allowed to transfer funds between investment options at least once in 90 days; while providing sufficient investment information to participants on a regular basis.
Selection of alternative investments: The role of the RPC is to provide participants a wide range of investment options with various investment objectives to make its members can invest based on their different investment needs. Investment choices made should indicate the type of property to the characteristics of different risks and benefits and the value of diversification. The following assets have characteristics desired investment is now:
• The money market instruments.
• Financial Instruments medium-term fixed-income
• Treasury Securities adjusted to a medium-term inflation
• Shares
Large cap growth stocks
Large cap stocks mixed
Large-cap stocks
Mid cap stocks mixed
Small cap stocks mixed
International stocks
• mutual fund life cycle (the funds were set up have diversified at retirement) The selection criteria and the replacement of the fund include:
• A wide range of investment options should be selected with the goal of allowing participants to diversify their investments and risks of the investment is consistent with the risk tolerance of the investment.
• The fund must have reasonable fees, including consulting fees, 12 (b) -1 and other charges.
• Each fund must have an investment strategy is set and clear explanation and must have evidence of this strategy being pursued over time.
• Profit from time to time and change the profitability of the fund for at least 3 years (preferably 5 years) before comparing good faith performance of a passive direct indicators with the same type of investment (e.g., large-cap stocks). This is a key performance indicator.
• The selected fund must:
Managed by a bank, an insurance company, an investment management company or an investment adviser (as defined by the Law on registered investment advisor in 1940) which was largely financed production management were at least 10 years and has found financial stability in that period.
Provide data on the quarterly performance is calculated including the time factor and the report on the total amount of fees and charges net.
Provide effective assessment indicates risk profile investment - profit of managers in relation to the passive index management and the other with the same type of investment.
Yet clear investment strategy applied and the documents proving that this strategy has been successfully applied over time.
• The transfer of funds between the investment fund is allowed in at least a quarter time, in order to satisfy the requirements of ERISA 404 (c)
Effective monitoring of investment: RPC will monitor investment performance and risks of each fund quarterly compared to landmark reasonable investment efficiency. In the case of a fund over a period of 5 years:
• Activity is less effective than an index fund with similar objectives (e.g. the same type of investment) or
• Rated less than 50% of funds with similar investment objectives in terms of investment efficiency.
RPC will review the fund to determine whether the performance of the fund by the fund managers, management practices or changes of the market, which will then decide whether the fund should be removed from the portfolio investment option or not. RPC will also review the performance of the fund over a period of five years, if possible, before making a decision.
As pointed out above, the RPC will evaluate the performance of each fund over a period of 5 years. RPC noticed that most of the investments are cyclical; therefore, at a time when a fund may not achieve the investment objectives or
When the fund failed to achieve the expected performance. The effect of this fund should be reported in the form of an annual rate of return taking into account the time factor. As mentioned above, these profits need to be compared with the appropriate index and similar funds in the most recent 5-year period (or longer).
In assessing the performance of each fund, authorized RPC recommendations change or delete a goal or an investment fund if the investment standpoint of RPC, objectives or investment funds that do not or is expected to achieve the targets specific activities; no longer fit the needs of Members or;, or if the point of view of the RPC, when a more appropriate investment options appear.
A member of the Commission of BMSR responsible investment of funds rapidly developing small cap stocks. Within two years, the fund has ranked in the top small cap investment funds grow faster and more efficient operation compared to a passively managed index include