FAMILY WEALTH OFFICE
Wealth Management Advisor
WHO WE ARE
Fortworth AG, a swiss company founded in 2014, is an independent family wealth office built around a team of highly experienced professionals, with a strong focus on computational finance.
We are Investment Strategists and Risk Management Specialists. We advise in the field of Wealth Management.
Fortworth's Advisors are registered in the client advisor register operated by BX Swiss AG, a Swiss stock exchange regulated under the Financial Market Infrastructure Act and supervised by the Swiss Financial Market Supervisory Authority FINMA.
Fortworth AG is Member of the Swiss Association of Wealth Managers (SAM | VSV | ASG) and also affiliated with the Verein Ombudsstelle Finanzdienstleister (OFD), recognised by the Federal Department of Finance (FDF).
We proudly operates in Switzerland, a country scoring AAA S&P credit rating.
Economically speaking, Switzerland is Europe‘s most liberal country, as well as being the most competitive and innovative nation in the world. There is a high level of political stability. Switzerland has an effective legal system, a powerful currency with a low rate of inflation, comprehensive protection of intellectual property and liberal employment laws – qualities which are especially important when it comes to pursuing business activity.
WHAT WE DO
We have a strong focus on computational finance, a field that combines principles from finance and economics with techniques from computer science, mathematics, and statistics to develop models and algorithms that can be used to analyze and understand financial markets and make informed investment decisions.
We exploit the potential of the most advanced technologies and combine it with the best human capital to achieve great efficiencies in terms of:
Wealth preservation and growth
We use mathematical and statistical models, developed over more than 20 years of research and asset management, to investigate financial markets with discipline and focus, to identify statistically robust market inefficiencies and to model ideas and investment strategies that deliver market-leading investment returns to our clients.
The adoption of a rigorous quantitative methodology allows us to quickly and deeply understand the complexity of the financial markets, their trend and development, to avoid classical behavioral errors related to instinct and emotionality and to manage more effectively extreme risks in order to achieve wealth preservation and growth.
Here are some specific ways that computational finance is used:
Data analysis: to analyze large amounts of financial data and extract meaningful insights. This can involve using machine learning algorithms to identify patterns and trends in the data, or developing custom algorithms to analyze specific types of data.
Modeling and simulation: to build and test financial models, such as those used to evaluate the risk and return of investments. These models can be used to simulate different scenarios and assess the potential outcomes.
Financial engineering: to design and analyze financial instruments, such as derivatives and structured products.
Risk management: to assess and manage risk in investments. This can involve developing algorithms to analyze market data and identify potential risks, as well as implementing systems to monitor and control risk on an ongoing basis.
Asset allocation: to provide tools and techniques to make more informed and efficient decisions about how to allocate assets, potentially leading to improved portfolio performance and risk mitigation. Asset allocation is the process of dividing an investment portfolio among different asset classes, such as bonds, stocks, gold, commodities, real estate, alternative investments and cash. The goal of asset allocation is to diversify the portfolio and manage risk by allocating assets in a way that is consistent with the investor's risk tolerance and investment goals.
Portfolio optimization: to optimize portfolios of investments by selecting the most appropriate mix of assets based on certain criteria, such minimizing risk.
We profile ourselves as a reference partner with solid know-how for qualified and institutional investors, family offices, fiduciaries, law and notary firms, tax consultants, accountants, foundations, funds and banks.
WHAT WE BELIEVE IN
Ideas are not enough in the pursuit of successful wealth management advisory.
We believe a strong culture of rigorous analysis and scientific research, supported by an accurate risk management and a robust infrastructure, is the bedrock of a successful wealth management advisory process. For this we continually refine our investment strategies, process and structure, providing to ourself the framework to innovate and compete successfully.
RISK MANAGEMENT AT THE CENTER
At Fortworth everything starts with data and a disciplined methodology underlies everything we do. All our processes are based on a continuous activity of design, test, refine, repeat and rigorous risk management.
Risk management is an important aspect of our wealth management advisory because it's an essential component of successful investing, enabling investors to navigate uncertainties, protect their capital, and pursue their financial goals with greater confidence. It involves identifying, assessing, and mitigating potential risks associated with investment decisions to protect capital and maximize returns. Here are a few reasons why risk management is important in investing:
Preservation of Capital: Effective risk management helps protect the capital invested. By identifying and addressing potential risks, investors can reduce the likelihood of significant losses and safeguard their investment portfolios.
Maximizing Returns: Risk and return are closely intertwined in investing. By managing risks appropriately, investors can strike a balance between potential returns and the level of risk they are comfortable with. This allows them to optimize their investment strategies and pursue the highest possible returns within their risk tolerance.
Diversification: Risk management often involves diversifying investments across different asset classes, sectors, and geographical regions. Diversification helps reduce the impact of individual investment losses by spreading the risk across a variety of holdings. It can enhance portfolio stability and protect against the volatility of any single investment.
Long-Term Sustainability: Risk management is crucial for the long-term sustainability of an investment portfolio. By addressing risks proactively, investors can avoid significant setbacks that may disrupt their financial goals. This includes being prepared for potential market downturns, economic uncertainties, or unexpected events that can impact investment performance.
Peace of Mind: Effective risk management provides investors with peace of mind. By understanding the risks associated with their investments and implementing strategies to manage those risks, investors can feel more confident and make informed decisions. This reduces anxiety and allows them to stay focused on their long-term investment objectives.
TYPES OF INVESTMENT RISKS
There are five key types of investment risks:
Market Risk: Market risk refers to the possibility of investment losses resulting from changes in market conditions, such as fluctuations in stock prices, interest rates, or foreign exchange rates. It affects nearly all investments and is driven by factors beyond an investor's control.
Credit Risk: Credit risk is the potential for losses arising from the failure of a borrower or issuer to fulfill their financial obligations. It primarily applies to bonds, loans, and other fixed-income investments, and can result from factors like default, bankruptcy, or downgraded credit ratings.
Liquidity Risk: Liquidity risk refers to the difficulty of buying or selling an investment quickly without causing a significant impact on its price. Investments with low liquidity may be harder to sell, potentially resulting in higher transaction costs or an inability to exit a position at a desired time.
Operational Risk: Operational risk arises from the potential for losses resulting from inadequate or failed internal processes, systems, or human factors. It encompasses risks related to errors, fraud, legal and compliance issues, technology failures, and other operational deficiencies that can impact investment performance.
Model Risk: Model risk refers to the potential inaccuracies or limitations of mathematical or statistical models used in investment decision-making. Models are used to predict or estimate various aspects of investments, and model risk arises from the possibility of flawed assumptions, data inputs, or flawed modeling techniques leading to incorrect conclusions or decisions.
RISK ASSESSMENT AND RISK TOLERANCE
Both risk assessment and risk tolerance are integral components of the investment process.
Risk Assessment Methods. Risk assessment involves evaluating the potential risks associated with an investment, such as market volatility, credit defaults, liquidity constraints, operational failures, and model inaccuracies. By conducting a thorough risk assessment, investors can identify and understand the risks they may face, allowing them to make more informed decisions. To assess these risks systematically, there are Quantitative Methods and Risk Metrics that provide investors with tools to assess and quantify different types of risks. By employing these techniques, investors can gain insights into potential losses and make informed decisions regarding their investments. It's important to note that risk assessment should consider both the likelihood and potential impact of risks to have a comprehensive understanding of the risk profile. Below key types of Quantitative Methods and Risk Metrics:
Scenario Analysis: This method involves creating hypothetical scenarios that represent different market conditions and analyzing the potential impact on investments. By considering various scenarios, investors can assess how their portfolios would perform under different economic or market circumstances.
Sensitivity Analysis: This technique involves examining how changes in specific variables, such as interest rates, exchange rates, or commodity prices, affect investment returns. By quantifying the sensitivity of investments to different factors, investors can better understand the potential risks associated with those variables.
Value at Risk (VaR): VaR is a widely used risk metric that estimates the maximum potential loss of an investment or portfolio within a specific time frame and at a given level of confidence. For example, a one-day 95% VaR of $100,000 implies that there is a 5% chance of experiencing losses exceeding $100,000 in a single day.
Conditional Value at Risk (CVaR): Also known as expected shortfall, CVaR measures the expected loss beyond the VaR level. While VaR focuses on the maximum potential loss, CVaR provides additional information by averaging the losses that exceed the VaR threshold. It offers a more comprehensive view of potential losses and is useful for capturing tail risks.
Conditional Drawdown at Risk (CDaR): CDaR measures the potential losses in an investment or portfolio from its peak value, focusing on drawdowns. It helps investors understand the magnitude of losses during adverse market conditions and captures the risk associated with significant drawdowns.
Risk Tolerance. It refers to an investor's ability and willingness to withstand fluctuations or potential losses in their investments. It reflects an individual's comfort level with taking on risk and can vary based on factors such as financial goals, time horizon, investment knowledge, emotional capacity and personal circumstances.
Integrating risk assessment and risk tolerance is crucial because it helps align investment strategies with an individual's risk preferences and financial objectives. By understanding their risk tolerance, investors can select investments that align with their comfort level, ensuring they are not taking on excessive risk or exposing themselves to undue stress.
Furthermore, risk assessment and risk tolerance are dynamic and should be periodically reviewed and adjusted as market conditions and personal circumstances change. Regularly reassessing risk profiles helps investors maintain an appropriate balance between risk and potential returns, ensuring their investment strategy remains aligned with their goals and risk tolerance over time.
Some common approaches to risk management in our advisory include:
Diversification: which involves spreading investments across a wide range of asset classes, sectors, and geographic regions. This can help to reduce the impact of any one investment on the overall portfolio, as the risks and returns of different investments tend to be uncorrelated.
Asset allocation: which involves the process of determining the optimal mix of different asset classes in a portfolio, based on an investor's risk tolerance and investment goals. By carefully balancing the allocation between different asset classes, we can help our clients to manage risk and optimize returns.
Risk budgeting: which involves setting a specific risk budget for each asset class in a portfolio, and allocating capital accordingly. This can help to ensure that the portfolio's overall risk level stays within acceptable limits.
Risk management infrastructure: which involves the process of developing and maintaining a robust risk management infrastructure, including risk management policies and procedures, risk reporting systems, and risk management systems and tools.
Risk monitoring and review: which involves ongoing monitoring, regularly reviewing and assessing the risks in a portfolio, and taking corrective action if necessary.
Comprehensive financial planning: wealth management advisory often involves comprehensive financial planning, which involves analyzing client's financial situation and developing a plan to achieve his financial goals. This can require identifying and mitigating financial risks, such as those related to retirement, estate planning, and insurance.
This approach allows us to deliver sustainable, long-term and repeatable results. Our first objective is the preservation of our clients' wealth.
ALL IN ONE SOLUTION & ALL WEATHER PORTFOLIO
CH0446338524 is the ISIN of Julius Baer's investment vehicle managed with our quantitative strategy - RPS (Reactive Portfolio Strategy).
It is a global multi-asset strategy with low volatility, based on a proprietary mathematical model that defines the asset allocation. It is designed for investors who, in a context of fluctuating markets, want a systematic and tactical process that is dynamic enough to "react" to market changes and achieve a positive total return in the long term. The quantitative RPS strategy is optimized to be minimally correlated with markets and resilient to extreme risks.
The portfolio is well diversified and covers all asset classes (cash, bonds, equities, gold, commodities, real estate and currencies).
The risk profile of the strategy is moderate: about 50% of the portfolio tends to be invested in cash and bond market (sovereign debt, investment grade credit and high yield) and the remaining 50% in other asset classes.
Investments can be made directly and through ETFs, ETNs and ETCs. Under particular market conditions, the portfolio's exposure may be reduced in favor of liquidity.
The Euro is the base currency of the strategy and the exchange rate risk is hedged at the sole discretion of the quantitative model.
The strategy is long only and the leverage is one (100%).
The liquidity of the vehicle is daily and it is priced continuously as an ETF. The real-time price is available via Bloomberg, Reuters, Telekurs and the Julius Baer website (link below).
This strategy is suitable for investors with a long investment horizon.
For further details, please refer to the prospectus (link below). An interactive dashboard with all the statistics and performance is also available.
OUTSIDE THE BOX THINKING
Our attitude is outside the box thinking. This is particularly useful in our job, as it can help us come up with innovative solutions to complex financial problem. This attitude also helps us not to get caught up in widely spread financial theories, adopted by banks and other financial institutions, which show obvious weaknesses in their assumptions.
For example, Modern portfolio theory (MPT) is a financial theory that explains how investors can construct portfolios to maximize expected returns for a given level of risk. It was developed by economist Harry Markowitz in the 1950s and has become a widely accepted framework, adopted by banks and many other financial institutions, for portfolio construction. But obvious are its weaknesses such as the following:
Assumes efficient markets: MPT assumes that financial markets are efficient, meaning that prices reflect all available information and that it is not possible to consistently earn abnormal returns through active management. However, some evidence suggests that markets may not be fully efficient and that it is possible to outperform the market through skillful active management.
Focuses on mean-variance optimization: MPT uses mean-variance optimization to determine the optimal portfolio, which involves balancing the expected return and risk of a portfolio. However, this approach is open to criticism for its reliance on historical data to determine the expected returns and risks of different assets, as future market conditions may differ from the past. Furthermore this approach for ignores other important factors such as liquidity, transaction costs, and taxes.
Ignores behavioral biases: MPT assumes that investors are rational and make decisions based on objective information, but research has shown that investors are prone to behavioral biases that can influence their decisions. MPT does not account for these biases, which can lead to suboptimal investment decisions.
Limited applicability: MPT is based on the assumption that investors are seeking to maximize returns, but this may not always be the case. For example, some investors may be more focused on preserving capital or generating a steady stream of income. MPT may not be as applicable to these types of investors.
Assumes a normal distribution of returns: MPT assumes that the returns of assets are normally distributed, meaning that they follow a bell-shaped curve. However, this assumption is not true in reality, and the use of mean-variance optimization may lead to suboptimal investment decisions in cases where the distribution of returns is significantly different from the normal distribution.
Ignores fat-tailed distributions: the assumption of a normal distribution of returns ignores the possibility of fat-tailed distributions, which means that the distribution has a higher probability of extreme outcomes compared to a normal distribution. This can lead to the underestimation of the risk of certain assets or portfolios, which could result in unexpected losses.
May not adequately capture risk: MPT uses standard deviation as a measure of risk, which may not always accurately reflect the potential losses that an investor may face.
We don't base our wealth management advisory on MPT.
WEALTH CHECK UP
By ensuring an independent assessment, we verify whether current wealth structure and investments are aligned with the personal situation, objectives and risk profile. We offer transparency on costs and returns.
WEALTH CONSOLIDATION & REPORTING
Wealth consolidation is the process of bringing together and organizing all of an individual's financial assets and liabilities in order to get a comprehensive view of his overall financial situation. This can include everything from bank accounts, investments, and real estate to debt and other liabilities.
Wealth reporting is the process of generating a report or summary of an individual's wealth, often for the purpose of financial planning or investment management. Thanks to our detailed reporting, we are able to deliver an overview of total assets and an assessment of their evolution in terms of returns, costs and risks.
Consolidating and reporting on an individual's wealth can be a complex process, particularly if they have multiple financial accounts and assets in different locations.
This service can help an individual make informed decisions about their financial situation and plan for the future.
We offer comprehensive advice on all aspects concerning the management of your entire assets.
Clients, in full autonomy, choose and maintain their reference custodian banks. With our supervision, we support clients in the process of coordinating their interests, assist them in investments and in the delicate process of structuring and managing portfolios, reducing the commission charges imposed by the financial industry.
We offer an "All In One Solution": everything that is necessary to keep the evolution of assets under control and to invest successfully:
Wealth Check up
Wealth Consolidation & Reporting
ASSET ALLOCATION &
INVESTMENT SOLUTIONS ADVICE
We specialize in global multi-asset strategies. Our specialist knowledge in computational finance allows us to offer efficient strategic asset allocation solutions for specific risk profiles.
Our management process of risk and performance is based on proprietary statistical and mathematical models for a precise and controlled investment steering. Our investments are carefully analyzed in terms of liquidity, maturity, diversification, expected return, costs and risks. Depending on objectives and needs, our algorithms develop short, medium and long-term asset allocation and define an appropriate balance between risk and return.
ACTIVELY MANAGED CERTIFICATES
We are also advisors for investment vehicles that implement our strategies or client-tailored strategies (for Professional or Qualified Investors).
ITALIAN FISCAL CONSOLIDATION SUPPORT
In addition to offering consolidated reports on overall wealth, we provide year-end tax consolidation for assets deposited with multiple swiss banks. We pre-fill the "Modello UNICO" for the italian tax declaration.
BANKING & FINANCIAL LITIGATION SUPPORT
We provide analysis and evaluation of the asset management of banks and other asset managers, of financial products and risk profiles, to support out-of-court negotiations and banking and financial litigation.
BUSINESS WEEKEND (CH)
Premium service: in a setting of total relaxation, we offer insights into economics, finance and the management of assets. Clients have our availability in moments that do not compromise their professional activity, for example during the weekend.
GIUSEPPE DI MARCO
FOUNDER & CEO
Giuseppe has gained a long experience in the financial industry, within leading banks and asset management companies.
He began his career in Asset Management, where he worked for several years as a portfolio manager and quantitative analyst, developing mathematical and statistical models for risk management.
Then he consolidated his experience in international and swiss Wealth Management, following institutional and private clients over more than ten years, eight of which at UBS.
In 2014, Giuseppe founded Fortworth, a family wealth office with a strong focus on computational finance, to offer an independent advisory, management and coordination centre for wealth interests.
Giuseppe has a Degree in Economics from University of Trento (Italy) and a Master of Corporate Finance and Financial Markets.
He is Certified Wealth Management Advisor and licensed as a Financial Advisor in Switzerland. He is registered in the client advisor register operated by BX Swiss AG, a Swiss stock exchange regulated under the Financial Market Infrastructure Act and supervised by the Swiss Financial Market Supervisory Authority FINMA.
Giuseppe is Member of the Swiss Association of Wealth Managers (SAM | VSV | ASG).
He speaks Italian and English.
We've assembled a group of individuals who excel in their respective fields, bringing you unparalleled expertise in the realms of Quantitative Finance, Computational Finance, Investment Strategies, Risk Management and Wealth Management Advisory.