. In the firm's opinion, asset allocation is the most important factor in determining portfolio returns and risk levels.Each fund's stated investment objective and policy determines portfolio asset allocations, which the Investment Committee adjusts depending on the overall economic outlook and equity valuation.EFG-Hermes uses a "bottom up" approach for equity management, concentrating on both fundamental and technical analyses. The firm believes that predicting future securities values depends mainly on forecasting future earnings and the market valuation of these earnings. In this context, it seeks to identify growth opportunities or deeply discounted value plays.A "top down" strategy is used for fixed income securities, focusing on interest rate forecasts followed by duration issuer quality and security liquidity.The following table shows an example of the performance of funds managed by EFG-Hermes performance update. It compares years 1996, 1997, 1998 as well as mid year, quarter, and last month. The table shows that all funds have been going down in 1997 then increased in 1998. This was because in 1997 the entire Egyptian market was going down starting February. In 1998, the entire market went up. The situation of the market could be detected from the Capital Market index at the bottom of the table. One of the factors that helped the funds of EFG-Hermes is that it began to purchase stocks in Mobinil in 1998. The following table shows the top 10 performance stocks in which EFG-Hermes invested in. Each of the funds has a prospectus (as previously explained). After the table are 2 examples of the prospectuses of two funds (Al Rajhy and Banque Du Cair)Portfolio ManagementThe difference between a fund a portfolio is that for the fund, the money managed is not owned by one individual, but instead by a group of people. As for the portfolio, it is the money of one organization or person. A conventional portfolio is formed out of a mixture ...
