Skip to content

A profitable investment

After an investment has been made, its success must be measured and, if necessary, compared with alternative investments. This is done by determining the investment’s performance.

Investment with performance: Sought and found!

Source: www.engineer-but-still-human.com (adapted)

What does "performance" mean?

In the broadest sense, the term performance stands for the return on investment or the relative financial yield of a portfolio. In a narrower sense, it is more likely to denote the performance of a portfolio manager against a benchmark. In capital market theory, on the other hand, the term is usually seen as the risk-adjusted return of a portfolio, or the risk-adjusted additional investment return generated by the portfolio manager compared to a passive investment strategy. The starting point for performance measurement is the calculation of the return over a specific period. The underlying definition of return depends on the respective objective within the framework of the performance assessment. When calculating the (exact) return of portfolios, inflows and outflows of funds must be considered. Generally, two different calculation methods are used to calculate performance:
  • Money-weighted rate of return: When applying the money-weighted rate of return method, which corresponds to the internal interest rate in investment accounting, the interim inflows and outflows are included in the calculation of performance by being discounted to the initial value.
  • Money-weighted rate of return: When applying the money-weighted rate of return method, which corresponds to the internal interest rate in investment accounting, the interim inflows and outflows are included in the calculation of performance by being discounted to the initial value.

Return and risk comparison: performance & volatility of different investment strategies

For the private investor, one important step towards understanding the relationship between the return and the risks taken is looking at the performance of an investment. By determining the performance, two or more financial investments can also be compared with each other. If this comparison is carried out continuously over a longer period, the result is a comparison of the performance of investment strategies.

The strategic success factors of long-term investment

Numerous researches and studies have shown that the choice of the investment strategy is by far the most important success factor for an attractive long-term performance. Harry Markowitz, who was awarded the Nobel Prize in 1990, was the leading expert in this field. The investment strategy and its implementation (“asset allocation”) are responsible for 70-80% of the subsequent investment success.

The stock ratio as a measure of the risk profile

Today, it is generally agreed in financial science that the stock ratio of a portfolio is a useful indicator for determining the potential risk and thus also the expected return. The higher the proportion of stocks, the higher the expected future price fluctuations, but also the expected returns. Many studies and calculations have shown that a return on stocks of 7-10 % (depending on the respective market) can be achieved in the long term.

Source: Credit Suisse/NZZ-Infografik (adapted)

Genéve Invest applies this rule for its clients!

These findings are also reflected in the performance figures of Geneve Invest’s four investment strategies over the past 13 years. These four investment strategies are: Performance results for our four investment strategies:
  1. In the “Fixed Income” category, the assets in the portfolio were invested in corporate bonds or in investment funds investing exclusively in corporate bonds. In this category, Genève Invest achieved an overall performance of 123.4 % (6.4 % p.a.).
  2. In the “Income plus Yield” category, a maximum of 30 % of the assets in the portfolio were invested in stocks, alternative investments or equity funds and the remaining assets were invested in corporate bonds or in investment funds investing exclusively in corporate bonds. Here, Genève Invest achieved an overall performance of 163.4 % (7.7 % p.a.).
  3. In the “Balanced Portfolio” category, a maximum of 70 % of the assets in the portfolio were invested in equities, alternative investments or equity funds and the remaining assets were invested in corporate bonds or in investment funds investing exclusively in corporate bonds. Here, Genève Invest achieved an overall performance of 237.8% (9.8% p.a.).
  4. In the “Dynamic Portfolio” category, more than 70% of the assets in the portfolio were invested in equities, alternative investments or equity funds, and the remaining assets were invested in corporate bonds or in investment funds investing exclusively in corporate bonds. Here, Genève Invest achieved a total performance of 287.2% (11% p.a.).
If you would like to know what risk profile your personal portfolio is based on, you can request a portfolio analysis from an expert
An experienced asset manager can provide much helpful advice in this respect.

Find out why an independent consultant is essential to managing your portfolio

Discover the investment strategies that we have developed for you.

We call you without obligation.

Fill out the form and we will contact you to give you more information.
Fields marked with * are required, other information can help us  improve our proposal.
Genève Invest accepts mandates starting at € 100.000

Lassen Sie jetzt Ihr Portfolio überprüfen

Füllen Sie dieses Formular aus, um eine unverbindliche Porfolioanalyse zu initiieren. Ein Berater zeigt Ihnen anschließend, wie Sie Ihr Depot hinsichtlich Diversifikation, Effizienz und Kostenminimierung optimieren können. Genève Invest nimmt Mandate ab 100.000 € an.