Jarda C., Czech Republic ”

Some investors, while embracing risk management, have largely focused on downside protection in their understanding of risk analysis. But risk control is not simply about avoiding the perils of aggressive investing; limiting risk can actually add to the accumulation of wealth in a portfolio. Moreover, the proper allocation of risk, using a risk budget, can greatly enhance returns within a given risk limit, which further increases the compound growth rate of wealth.

Investors tend to view the risk/return relationship as a trade-off in which the pursuit of higher long-term returns entails the shouldering of greater risk. This oversimplifies the role of risk within the portfolio. Lower risk - in the form of reduced volatility - can actually lead to greater median expected wealth in the long run. Even investors who are not concerned with absolute loss in the short-term should pay attention to volatility and its impact on long-term return.

Investors are facing global capital markets that are likely to deliver lower than historical returns going forward. Four major economic and social paradigm changes have cut the risk premia offered by financial assets: deregulation, globalization, increased life expectancy, and improved diversification methods. By decreasing risks or increasing tolerance for volatility, these forces have combined to produce a distinctly different optimal portfolio than was the case 20 years ago. To cope with this new environment, they need to use advanced methods to maximize return efficiency. Verifield have developed such methods as effective day trading and commodities in order to deliver optimal gains for all ranges of investments.

Some of our clients find certain types of businesses unacceptable - for example most cancer charities choose not to support the tobacco industry. We try to avoid such incompatibilities . We prefer the flexibility of a menu of screens for clients to choose from rather than a single ethical policy contained within a pooled fund. For our largest clients we can create a particular ethical screen to suit their needs.

We seek to ensure that all companies in which our clients are invested comply with best market practice and act in the interest of shareholders. When considering our position on such matters as remuneration, board structure and incentives, our target is to promote best practice but we agree that a precise set of rules can't be suitable for every company's circumstances and we are to be flexible.

We believe that the responsible use of voting rights is part of the process of both preserving and increasing the value of the investments entrusted to our management and therefore, where our clients have agreed, we use our discretion in voting to achieve that aim.