Wealth management

Our client centric wealth management activities are based on dynamic analysis tools and transparent reporting in combination with an independence from banks and abundant investment opportunities based on an open architecture.

Risk management plays a vital role in our investment philosophy. We review all investments critically and make rational choices. Our wealth management activities are supported by our unique X-Ray service, which we employ to analyse the client’s entire portfolio holdings in co-operation with them, irrespective of who manages their portfolios, or were the assets are held. Our X-Ray service collects asset and portfolio data from the client’s various wealth managers and custodians, which is then consolidated. This consolidated information enables us to provide a complete synopsis of the client’s overall wealth.

Our X-Ray service compiles, processes and structures the data in a way which allows for the analysis and look-through of all portfolio holdings, both by asset class as well by instrument-by-instrument, which is then successively presented in an easily comprehensible format. JAM’s wealth managers are the only wealth mangers able to advise their clients based on their consolidated holdings and the unique information attached thereto – information that other wealth managers do not hold.

Client cases

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Portfolio optimization for an institutional client utilizing a global portfolio analysis

JAM has for several years acted as an advisor to a large institutional client on fixed income instruments, such as corporate and sovereign bonds. The client also holds a number of select mutual funds. The client’s intention was to determine the risk level of their entire portfolio. As a result, JAM was tasked by the client to conduct such an analysis. The global portfolio analysis was carried out using the X-Ray service, including a full allocational look-through, risk simulation, stress testing and an analysis of probable return outcomes given different time periods.

The client was extremely satisfied with JAM’s analysis of the portfolio and carried out the given allocational recommendations.

From consolidated reporting to enhanced co-operation with a private investment firm

A private investment firm put mandates out to tender among several wealth managers with the simultaneous desire for a single party taking responsibility for the consolidated reporting of all the outsourced portfolios. The client’s aspiration was to obtain a reporting facility which was easily comprehensible and which would allow for the monitoring and comparison of the various returns achieved and risks carried by the various wealth managers. JAM won the tender for the consolidated reporting mandate and began to meet investment firm’s Board regularly, in order to present the efficient frontier, allocations, risks and returns of the overall portfolio. Over time, the Board’s understanding of the overall portfolio grew significantly as a result of the consolidated reporting provided by JAM. As a result of the enhanced understanding, JAM was tasked by the Board to conduct an efficiency analysis of all the mutual fund holdings in the portfolio. This was carried out using JAM’s unique X-Ray service. The independency of the analysis was greatly appreciated and the inefficient mutual funds were substituted with more efficient ones.

As a result of the successful cooperation, JAM now acts as a close partner of the investment firm and as an advisor to the entire portfolio.

The analysis and efficient monitoring of a private client’s portfolio

An entrepreneur who had recently exited his business entered into several relationships with wealth managers in both and abroad, with the intention of conducting annual competitive tenders. As a result of the numerous relationships held it however became rather challenging to maintain an accurate understanding of the overall portfolio, as all of the reporting received came in varying formats and as it was hard to assess the efficiency of the selected wealth managers. As a consequence, the client was in the need of reliable party providing a consolidated reporting service. The client had heard about JAM’s X-Ray service, and consequently authorized JAM’s wealth managers by way of power-of-attorneys to gather and to collect data and information from all of the selected wealth managers, in order to compile this into a consolidated report allowing for the unified comparison of the various portfolios.

JAM now works in close co-operation with the client, assisting with the monitoring and the management of the client’s selected wealth managers.

Enhancing the business opportunities for an investment advisory firm

An investment advisory firm that had been distributing third-party mutual funds for numerous years wanted to offer its clientele an enhanced overview of the investments that had been made within the scope of their client advisory activities. The investment advisory firm’s clients had until then received a flora of various portfolio reports directly from the respective third-party mutual fund and wealth management firms. As a result, the clients lacked a holistic overview of their holdings. The investment advisory firm also wished to provide its clientele a value-added service including various analyses of the overall portfolios as well as of single client holdings in the form of mutual fund efficiency reports.

The advisory firm subsequently decided to outsource the client reporting and analytics to JAM. As part of this process, the clients’ transaction data and holdings are automatically transferred from the advisory firm’s portfolio management systems to JAM X-Ray platform. The X-Ray service then performs all of the portfolio computing and analytics for all client portfolios, and then distributes automatically fully completed end-client reports to the advisory firm’s CRM system in a white-label format, in the look-and-feel of the investment advisory firm.

As a result of this partnership, the client advisors of the investment advisory firm have significantly enhanced their positions as the trusted advisors of their end-clients, by responding to increasingly demanding client wishes while at the same time improving the business opportunities of the investment advisory firm.

JAM’s investment philosophy

Our customer-oriented asset management service is based on dynamic analysis tools, transparent reporting that supports investing activities, an open architecture and our independence from banks. Risk management plays an important role in our investing philosophy. We review different investments critically and make rational choices.

The foundation of the asset management operating model is our investment strategy, and its cornerstone is international distribution, with a weight on the best areas, sectors and themes based on our views at each given time. We do not analyse individual companies or sectors ourselves but use the best possible fund managers, depending on the theme and area, to manage them.

Risks are adjusted to economic cycles at different phases by weighting different asset types. The factor with the biggest effect on expected yield is weighting equity, fixed income and alternative investments based on the market situation. In portfolio management and investment advice, we primarily utilise the best investment funds and index ETFs on the market, as well as investments in shares, corporate bonds, state bonds and structured products according to our market insight.

Alternative investments balance the movements of equity and fixed income investments and improve the yield-risk ratio of the portfolio as a whole. When all of the tools used in asset management are compatible and sufficiently clear, it is possible to focus on the essential things that we can influence ourselves in portfolio management.

These include:

ALLOCATION
DISTRIBUTION
COST-EFFICIENCY
MANAGER SELECTION
Responsible and Sustainable Investments (ESG)

The distribution of investments between different instruments and markets, accounts for the majority of the yields and risks of investments. Changing the allocation has the biggest effect on long-term yields, and therefore the emphasis of asset management is on allocation.

The investment-related risk can be partially managed. Risk should not be avoided, as risk also makes higher yields possible. The easiest way to manage risks is to distribute investments geographically, between several industries and investments. Distributing investments between different asset types makes it possible to maximise the yields, taking into account the investor’s risk tolerance.

Low expenses translate into higher yields in the long term. An asset manager, fund company or investments should not be selected exclusively based on their history, as predicting the future is uncertain. The only thing that the investor can know in advance is the level of expenses. One of the cornerstones of JAM’s selection of financial instruments is the relationship between the level of overall expenses and the realised yield-risk ratio as well as future yield expectation of the investment.

The investment-related risk can be partially managed. Risk should not be avoided, as risk also makes higher yields possible. The easiest way to manage risks is to distribute investments geographically, between several industries and investments. Distributing investments between different asset types makes it possible to maximise the yields, taking into account the investor’s risk tolerance.

JAM Advisors utilize mainly third party active and passive investment funds, as asset allocation building blocks in our client’s investment portfolios and in our own funds.

Our manager selection process is not only driven by return characteristics, but a strong emphasis is also put on responsibility and sustainability factors. Our ESG evaluation process is based on the verifications we receive from the target fund managers and independent service providers. We continuously follow and evaluate the ESG tools our selected fund managers use and we also develop ESG reporting capabilities for our clients.

Our strong conviction is that ESG investing is a risk mitigation and long-term return enhancement strategy. Companies that have a sustainability-based approach to their businesses are more profitable over time and deliver better returns to their shareholders over time. The global capital flows are growing along with investor awareness and thus providing additional return potential for investors.

For us ESG investing is all about providing a strong long-term risk return potential for our clients, while harnessing the positive impacts for our society and the environment.

Kindly contact Antti Rikka for all ESG related enquiries.

Our investment strategy

Underlying JAM’s investment strategy is a strong market analysis based on strategic and tactic allocation insight.

STRATEGIC ALLOCATION
Long-term trends and allocation of asset types

The strategic allocation of JAM is based on monitoring both quantitative indicators and qualitative market analyses. In technical, quantitative analysis we monitor a pre-defined set of macroeconomic indicators, such as equity, fixed income, currency and commodity market indicators from the most significant geographic areas. The indicators are selected so as to provide us with as comprehensive a view of the economic cycle as possible, how the economy will develop and how companies’ profits will develop.

In addition, we qualitatively analyse the macroeconomic consensus view by meeting approximately 200 representatives of different fund companies each year. This is made possible by the fund companies understanding that we are operating based on a fully open architecture. The fund companies present us with their best ideas and market insights in force at the time, because they know that we are not limited to a pre-defined network of partners. We offer our customers a genuine opportunity to invest in international top funds if they are efficient in terms of yield and risk.

TACTICAL ALLOCATION
Short-term trends

JAM’s investment board, portfolio management and analysis teams and asset managers responsible for customer accounts meet once a week to discuss the prevailing short-term economic and market trends based on the above-mentioned indicators. In describing the tactic allocation, we also utilise the market insights of JAM’s different service areas. These service areas include analysis service, fund service, algorithm asset management service and structured products. The investment board publishes a monthly newsletter in which it reviews its most recent observations from different markets.