Truston’s Risk Management and Compliance Team is responsible for managing all firm-wide risks. The Team should monitor regularly, so that Truston adheres to strict investment risk management control processes related to the monitoring of investment performance, compliance to investment objectives and investor guidelines
1. Performance Evaluation
We conduct performance and risk-return analysis on a daily, weekly, monthly, quarterly and yearly basis.
We monitor risk metrics such as Tracking Error, Information Ratio, Volatility, Sharpe Ratio and so on.
On a monthly basis, we analyze the performance attribution by decomposing the excess return into asset allocation effect, sector allocation effect and stock selection effect.
2. Self-Regulation and Ethics
In addition to following relevant laws and regulations, we have implemented a strict set of internal guidelines in order to protect the interest of our clients. These guidelines cover matters such as entertainment with clients, confidential information, and compensation from other activities. Employees are required to report periodically to the compliance officer to ensure that no rules have been broken.
In conjunction with the Risk Management Team, the Compliance Officer monitors activities for the potential breach of laws and regulations or internal misappropriations through the trading system and fund administration system.
3. Conflict of Interests
There is a central trading desk (trading team), it is separated from portfolio managers.
Trading information is kept from research analysts and staff dealing with proprietary investments.
Employees are prohibited from trading stocks in their own accounts.
4. Risk management process
The Head of the Risk Management and Compliance Team report the current risk status of the portfolios to the Risk Management Committee, whose meetings are held as and when needed.
Pre-trade Risk Management and Compliance Check
Post-trade Risk Management and Compliance Check
Performance Attribution and Risk-Return Analysis
The Risk Management and Compliance Team are responsible for identifying and controlling risks. In other words, the team monitors all potential risks on a firm-wide scale. It includes operational risk, financial risk, technological risk, compliance risk and so on.
The Risk Management and Compliance Team perform risk control and monitoring in a diverse set of the risk management systems.
| Risk Factor | Risk Management |
|---|---|
| Market Risk/ Liquidity Risk |
Risk-adjusted return analysis Excess return analysis Monitor minimum cash and equivalents compared to the NAV Post compliance check more than 30% of the 20-day average daily trading volume |
| Counterparty / Credit Risk |
Broker allocation policy Investing only in qualified investment assets Strictly prohibit except investment universe |
| Operational Risk/Legal Risk |
Daily Operation Check List Daily NAV Reconciliation Daily Compliance Report |