Page 181 - Profile's Unit Trusts & Collective Investments - September 2025

Fund manager interviews Chapter 9

„ Liquidity and Trading Risk Controls
Invest only in highly liquid instruments.
Rebalancing sizes are capped at ≤5% of Average Daily Volume (ADV) to minimise market impact.
„ Concentration and Exposure Limits
Maximum per-stock weight: 7%.
Minimum per-stock weight: 0.1%.
Cash maintained at <1% NAV; any excess is redeployed.
Largest exposures capped to reduce idiosyncratic risk.
„ Operational and Regulatory Risk Management
Automated pre- and post-trade compliance checks.
Built-in regulatory limits within the portfolio management system.
External compliance oversight
Disaster recovery and business continuity plans tested regularly.
Comment on the year ahead and, if possible, estimate the performance of your fund over 2 or
3 years. What are your targets and objectives for the year ahead?
The Methodical BCI Equity Fund is an actively traded, fully benchmark-agnostic strategy. This
means we do not reference benchmark weights in any way – instead, the portfolio is constructed
systematically from the most liquid shares showing the strongest price momentum.
We apply a strict, rules-based investment process that has been consistently followed since
inception. Importantly, in over nine years of managing the fund, we have never overruled the process.
This discipline ensures that decisions are free from subjective bias and grounded entirely in data
and systematic signals.
Looking ahead, we do not forecast equity market direction or expected percentage returns. Our
philosophy is to react to trends as they emerge rather than predict them. Should markets weaken,
the strategy will remain invested in strong-performing sectors while shifting toward a more defensive
positioning.
For investors, the key expectation is that this is a long-term strategy. We believe a minimum
five-year investment horizon is essential when allocating to any equity manager, particularly a
momentum-based approach, as shorter-term market noise can obscure the longer term benefits of
the strategy.
Our objective remains unchanged: to deliver consistent alpha over time by systematically
exploiting momentum risk premia in equity markets, while managing downside risk through our
regime filter and disciplined portfolio construction.
Are equity markets in general overpriced? Do you anticipate a significant correction?
We do not take a view on whether equity markets are currently overpriced or attempt to forecast a
significant correction. Our philosophy is that markets can remain irrational longer than investors can
stay liquid, and expensive markets can often rally far beyond expectations.
Instead, we follow a systematic momentum and trend-following approach, which is inherently
reactive rather than predictive. This means we remain invested in the sectors and stocks showing
the strongest trends. At the same time, our regime filters gradually shift exposure towards a more
diversified, defensive portfolio once broader market weakness emerges. By adhering to a rules-
based process and responding only to price trends, we avoid subjective forecasting and allow the
data to dictate positioning.

Could you identify three shares that fall within your universe that you think will perform well
in the medium term?
As a systematic, rules-based manager, we do not make forecasts or discretionary stock calls.
Instead, our process identifies the strongest momentum trends within our defined investment
universe, and allocations are driven entirely by these signals.

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