Risk Management

Risk Management

WorldOver’s risk management has the primary objective of avoiding loss of capital rather than reducing volatility.

Although we use industry accepted benchmarks to measure performance, our overriding goal is to achieve superior returns for our clients. To this end there will be a constant assessment of the
portfolio characteristics and the resulting risk.

Although we may utilize various risk measurement systems, experience has shown that the best risk management tool is a rigorous and continuous focus on profit and loss performance attribution and rapid identification of any problem areas.

The nature of WorldOver’s portfolio which is concentrated in relatively few small to mid-cap, somewhat out-of-favour stocks means that the key risks relate to the performance of these individual stocks. They are usually more volatile and less market-correlated than the larger equities which comprise the bulk of the benchmark market indices.

WorldOver does its best to reduce these risks by performing in depth research on each counter and by buying when we deem them to be extremely undervalued.

In addition to the risk of the individual stocks, there are also sector, country, and overall equity market risks.

WorldOver regularly analyzes its portfolio with regard to these generalized market risks arising from credit concerns, valuation levels, commodity exposures, etc. and attempts to reduce their negative impact on the portfolio’s performance by employing the cheapest and most efficient risk management available.

Although WorldOver is agnostic as to instrument choice, using cash equities, options, futures, etc., in practice the risk management strategy will often employ the flexibility provided by the options markets in order to tailor a specific return profile.