Investment Fund Selection - Process

How are investment funds selected?


The funds include over 1,200 funds managed by leading investment firms worldwide which are marketed in Portugal by Banco Carregosa. The building of portfolios follows a three-phase rigorous process. 

First, the strategic allocation is determined, that is, the long-term allocation according to the investment objectives, using stock, bond, monetary market instruments, absolute return, mixed and alternative funds.

In a second phase, the allocation is adjusted according to the monthly information provided by Banco Carregosa’s Investment Committee. Following a macroeconomic analysis by this Committee, a tactical allocation is executed. Thus, greater or lesser weight will be attributed to each class according to the Committees prospects. 

In a third phase, funds are rigorously selected which will represent the allocations defined in the second phase. This selection takes into account quantitative and qualitative criteria. The most relevant among the former are past performance, volatilities obtained, the fund’s Sharpe ratio, maximum drops in specific years, and performance against benchmarks. As for the latter criteria, we take into account the management team and the expertise of the managing firm.