Identify client’s risk assessment (objectives and constraints) to determine risk profile
Inform client about risks associated with the investments within an agreed mandate
Evaluate potential risks
Assess risk measures (Volatility, TE, VaR, etc.)
Characterise identified risks
Manage and diversify total risk of client’s investments
Adopt mechanisms to minimise risk (e.g. limit portfolio exposure to certain risks as concentration, currency, emerging markets)
RISK MONITORING & REVIEW
Ensure all relevant risk guidelines, regulatory and compliance requirements are being met.
Analyse changes in the portfolio’s overall risk profile e.g. if a security is included in the portfolio and take action accordingly
Regularly monitor sources of volatility, tracking error, etc.