Investment process

Erste Asset Management manages a capital of approximately 8 billion RON in investment funds open to any person. The Erste AM team, composed exclusively of large Romanian experts, is a member of Erste Group, one of the largest financial services providers in Central and Eastern Europe.

All investment processes are based on the following principles:

Team Approach The close and continuous collaboration within the teams of specialists and between investment departments creates an important competitive advantage
Flexibility Short distances between the teams and the management of the investment department (Chief Investment Officer) allow for a rapid response to external events, such as market shocks.
Consistency Erste AM is faithful to its one chosen investment strategy, but it also works continuously to further its development.
Traceability 
The decisions of fund managers must be traceable. Only then can continuous quality assurance and improvement be ensured.

The different asset classes, like equities, bonds, commodities, etc. require different methods and models of assessment. The main approaches at Erste Asset Management are:

Investment Process

Description

Example of Use

Bottom Up - qualitative

 

The selection of individual securities is the central focus; the portfolio composition is influenced by stock selection.

Eastern European equities

Top Down

 

Economic analysis influences the composition of the portfolio at country or sector level.

Mixed Funds

Fundamental-quantitative

 

The different asset classes are analysed for portfolio creation, on the basis of fundamental constants within the historical nexus.

Global equity funds, where country weighting or sector weighting is in the foreground

Technical Models

 

These models serve to determine short, medium or long-term trending. The output of these models leads to buy and sell signals.

Are used as an indicator for buy and sell signals

Best Execution

Best Execution means “best possible implementation” and refers to the quality standards that apply to Erste Asset Management in the investment process.

We have our own Trading Desk, which is located in the Investment Department. In addition, transactions are carried out directly by our Erste AM fund managers. Only Erste Asset Management-chosen and Erste Group-approved traders may conduct transactions.

Erste Asset Management is based on “Best Execution” requirements of the EU Directive on Markets for Financial Instruments (MiFID).

Remuneration policy

In accordance with the legal provisions applicable to remuneration, Erste AM will observe the following principles:

1. The remuneration system implemented by Erste AM promotes correct and efficient risk management and does not encourage risk-taking that exceeds tolerated levels.

2. The remuneration policy of Erste AM is written in accordance with the applicable regulations and strategy of the Erste Asset Management Group, taking into account the Erste AM standards and the managed entities (collective or individual investment portfolios) in order to avoid conflicts of interest.

3. In the performance assessment, Erste AM ensures that the evaluation process is based on long-term performance and that the actual payment of remuneration performance components extends over a period that takes account of existing risks.

4. Personnel employed in control functions are compensated independently of Erste AM's performance. The appropriate authority and the remuneration of these employees is determined on the basis of the achievement of its own objectives, without taking into account the results of the area it monitors.

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