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88-436: Established as a traditional private bank and named after Swiss banker Julius Bär , it provides investment management , real estate financing, wealth management , and select offerings in sales and trading based on an open and managed architecture. The majority of income is generated by commissions and service fees. Located in 28 countries, it is known for its banking secrecy and client confidentiality . Julius Baer employs

176-576: A 14% increase in the previous year and was due both to the recovery in equity markets during the year and an inflow of new funds. As of 2011 the US remained by far the biggest source of funds, accounting for around a half of conventional assets under management or some $ 36 trillion. The UK was the second-largest centre in the world and by far the largest in Europe with around 8% of the global total. The 3-P's (Philosophy, Process, and People) are often used to describe

264-524: A Baer subsidiary in the Cayman Islands. These documents purportedly exposed alleged tax evasion and money laundering schemes. The case garnered significant attention due to its implications for free speech and the right to information. It became a critical point of discussion among various organizations and media entities concerning the ethics and legality of whistleblowing and the publication of sensitive financial information. Initially, Julius Baer obtained

352-466: A listed public company in 2005. In September 2005, the bank acquired the formerly independent private bankers Ferrier, Lullin & Cie SA, Ehinger & Armand von Ernst AG, Banco di Lugano and the asset management house GAM (Global Asset Management) from UBS, making it one of the largest independent asset managers in Switzerland. In 2012, the bank acquired Merrill Lynch's wealth management business outside

440-452: A major shift in top management. MFS's assets under management grew from $ 55 billion to $ 90 billion between 1997 and 1998, and was reported to be the fastest growing company amongst the twenty largest that funds sold through brokers . During the early 2000s, MFS and five other mutual fund companies in the Boston area were investigated by Massachusetts and New Hampshire regulators. That same year,

528-843: A money laundering scheme associated with corrupt Venezuelan officials. The scandal came to light in 2018 when Matthias Krull, a former banker at Julius Baer, was arrested on money laundering charges in Miami while vacationing with his family. Krull's cooperation with U.S. authorities led to a reduction in his 10-year prison sentence by 65% in September 2023. Swiss regulators also found systemic failures in Julius Baer's compliance practices in 2022, which included deficiencies in identifying its Latin American clients and incentivizing behaviors that raised money laundering concerns. In 2015, Julius Baer began cooperating with

616-584: A permanent injunction against Dynadot, resulting in the shutdown of the Wikileaks.org domain name. This move was widely criticized as an overreach and a potential violation of First Amendment rights in the United States. In response to this injunction, a coalition of organizations including the Electronic Frontier Foundation (EFF), American Civil Liberties Union (ACLU), and others intervened in

704-552: A personal and business perspective. Greater money management can be achieved by establishing budgets and analyzing costs and income etc. In stock and futures trading , money management plays an important role in every success of a trading system. This is closely related with trading expectancy: “Expectancy” which is the average amount you can expect to win or lose per dollar at risk. Mathematically: Expectancy = (Trading system Winning probability * Average Win) – (Trading system losing probability * Average Loss) So for example even if

792-510: A poor choice of benchmark. Meanwhile, it does not allow the separation of the performance of the market in which the portfolio is invested from that of the manager. The information ratio is a more general form of the Sharpe ratio in which the risk-free asset is replaced by a benchmark portfolio. This measure is relative, as it evaluates portfolio performance about a benchmark, making the result strongly dependent on this benchmark choice. Portfolio alpha

880-524: A previous employee of Julius Baer, worked for the bank from the early 1980s until 2002 when he was dismissed for data theft. In 2008, Elmer had previously leaked bank information to Wikileaks, according to the German magazine Der Spiegel, which had referred to his documents as ‘partly authentic and partly fake'. It was subsequently reported that the discs had been empty, and the event a ploy to draw attention to Elmer’s court proceedings in Switzerland. Alex Widmer ,

968-424: A reasonable price (GARP), market neutral , small capitalisation, indexed, etc. Each of these approaches has its distinctive features, adherents, and in any particular financial environment, distinctive risk characteristics. For example, there is evidence that growth styles (buying rapidly growing earnings) are especially effective when the companies able to generate such growth are scarce; conversely, when such growth

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1056-403: A small portion of the documents concerned Julius Baer directly. WikiLeaks cleverly circumvented the website shutdown by utilizing alternate domains and an accessible IP address. Pursuing further legal action to block these alternatives would have been a complex and geographically scattered endeavor, proving challenging for Julius Baer. Adding to the drama, a fabricated claim of misidentification

1144-411: A specialist bachelor's degree , with title in "Investment Management" or in "Asset Management" or in "Financial Markets". Increasingly, those with aspirations to work as an investment manager, require further education beyond a bachelor's degree in business, finance, or economics. There is much discussion as to the various factors that can affect the performance of an investment manager, including

1232-526: A staff of over 6,600 worldwide. The group manages assets for private clients from all over the world. The firm's services consist mainly of wealth management and investment consultancy . The bank provides products via its open architecture platform as well as securities and foreign exchange trading . The shares of the Julius Baer Group are listed on the SIX Swiss Exchange and form part of

1320-428: A three-factor model to describe portfolio normal returns ( Fama–French three-factor model ). Carhart (1997) proposed adding momentum as a fourth factor to allow the short-term persistence of returns to be taken into account. Also of interest for performance measurement is Sharpe's (1992) style analysis model, in which factors are style indices. This model allows a custom benchmark for each portfolio to be developed, using

1408-405: A trading system has 60% losing probability and only 40% winning of all trades, using money management a trader can set his average win substantially higher compared to his average loss in order to produce a profitable trading system. If he set his average win at around $ 400 per trade (this can be done using proper exit strategy) and managing/limiting the losses to around $ 100 per trade; the expectancy

1496-430: A winning or losing trading system, such as %Loss probability > %Win probability). MFS Investment Management MFS Investment Management ( MFS ) is an American-based global investment manager , formerly known as Massachusetts Financial Services . Founded in 1924, MFS is one of the oldest asset management companies in the world and has been credited with pioneering the mutual fund . The first mutual fund,

1584-653: Is a strategic technique to make money yield the highest interest-output value for any amount spent. Spending money to satisfy cravings (regardless of whether they can justifiably be included in a budget) is a natural human phenomenon. The idea of money management techniques has been developed to reduce the amount that individuals, firms, and institutions spend on items that add no significant value to their living standards, long-term portfolios, and assets. Warren Buffett , in one of his documentaries, admonished prospective investors to embrace his highly esteemed "frugality" ideology. This involves making every financial transaction worth

1672-415: Is around: Expectancy = (Trading system Winning probability * Average Win) – (Trading system losing probability * Average Loss) Expectancy = (0.4 x 400) - (0.6 x 100)=$ 160 - $ 60 = $ 100 net average profit per trade (of course commissions are not included in the computations). Therefore, the key to successful money management is maximizing every winning trades and minimizing losses (regardless whether you have

1760-467: Is because equities are riskier (more volatile) than bonds which are themselves riskier than cash. Against the background of the asset allocation, fund managers consider the degree of diversification that makes sense for a given client (given its risk preferences) and construct a list of planned holdings accordingly. The list will indicate what percentage of the fund should be invested in each particular stock or bond. The theory of portfolio diversification

1848-418: Is obtained by measuring the difference between the return of the portfolio and that of a benchmark portfolio. This measure appears to be the only reliable performance measure to evaluate active management. we have to distinguish between normal returns, provided by the fair reward for portfolio exposure to different risks, and obtained through passive management, from abnormal performance (or outperformance) due to

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1936-422: Is often used to refer to the management of investment funds , most often specializing in private and public equity , real assets , alternative assets , and/or bonds. The more generic term asset management may refer to management of assets not necessarily primarily held for investment purposes. Most investment management clients can be classified as either institutional or retail/advisory , depending on if

2024-404: Is plentiful, then there is evidence that value styles tend to outperform the indices particularly successfully. Large asset managers are increasingly profiling their equity portfolio managers to trade their orders more effectively. While this strategy is less effective with small-cap trades, it has been effective for portfolios with large-cap companies. Fund performance is often thought to be

2112-437: Is that the investment manager prefers a closer, more open, and honest relationship with a company's management team than would exist if they exercised control; allowing them to make a better investment decision. The national context in which shareholder representation considerations are set is variable and important. The USA is a litigious society and shareholders use the law as a lever to pressure management teams. In Japan, it

2200-557: Is the case when a large active manager sells his position in a company, leading to (possibly) a decline in the stock price, but more importantly a loss of confidence by the markets in the management of the company, thus precipitating changes in the management team. Some institutions have been more vocal and active in pursuing such matters; for instance, some firms believe that there are investment advantages to accumulating substantial minority shareholdings (i.e. 10% or more) and putting pressure on management to implement significant changes in

2288-555: Is the professional asset management of various securities , including shareholdings, bonds , and other assets , such as real estate , to meet specified investment goals for the benefit of investors . Investors may be institutions , such as insurance companies, pension funds, corporations, charities, educational establishments, or private investors, either directly via investment contracts/mandates or via collective investment schemes like mutual funds , exchange-traded funds , or Real estate investment trusts . Source: Venture

2376-422: Is to report the after-tax position of some standard taxpayer. Performance measurement should not be reduced to the evaluation of fund returns alone, but must also integrate other fund elements that would be of interest to investors, such as the measure of risk taken. Several other aspects are also part of performance measurement: evaluating if managers have succeeded in reaching their objective, i.e. if their return

2464-439: Is traditional for shareholders to be below in the 'pecking order', which often allows management and labor to ignore the rights of the ultimate owners. Whereas US firms generally cater to shareholders, Japanese businesses generally exhibit a stakeholder mentality, in which they seek consensus amongst all interested parties (against a background of strong unions and labor legislation ). Conventional assets under management of

2552-413: Is what investment management firms are paid for. Asset classes exhibit different market dynamics, and different interaction effects; thus, the allocation of money among asset classes will have a significant effect on the performance of the fund. Some research suggests that allocation among asset classes has more predictive power than the choice of individual holdings in determining portfolio return. Arguably,

2640-450: The CAPM , allowing a better description of portfolio risks and a more accurate evaluation of a portfolio's performance. For example, Fama and French (1993) have highlighted two important factors that characterize a company's risk in addition to market risk. These factors are the book-to-market ratio and the company's size as measured by its market capitalization. Fama and French-, therefore proposed

2728-638: The Massachusetts Investors Trust fund, is still in operation today. MFS had $ 528.4 billion in assets under management as of January 31, 2020. The company was founded in 1924 by Sherman Adams, Charles H. Learoyd and Ashton L. Carr. L. The company's oldest fund is the Massachusetts Investors Trust, a mutual fund created with $ 50,000 at the company's inception and reported to be "the world's first open-end investment fund". The company used "brokerage channels" to market its shares to

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2816-552: The SMI MID , the mid-cap stock index comprising the 30 largest and most liquid listed Swiss companies not in the SMI. Julius Bär Group Ltd. is a Swiss private banking group which is the parent company of Bank Julius Baer, a traditional private bank based in Zürich , Switzerland. The firm dates itself back to 1890 when an exchange office was founded by Ludwig Hirschhorn and Theodor Grob. Grob left

2904-487: The Securities and Exchange Commission alleged that MFS made "false and misleading" statements in its fund prospectus about its policy on market trading and market timing. This was part of a wide-ranging investigation; see 2003 mutual fund scandal for additional details. MFS paid $ 350 million to settle state and federal fraud charges. MFS appointed Robert Pozen as non-executive chairman from 2004 to 2010. MFS then implemented

2992-580: The Swiss Financial Market Supervisory Authority (FINMA) censured Julius Baer for falling "significantly short" in combating money laundering between 2009 and 2018 with regards to corruption allegations involving FIFA and PDVSA , Venezuela's state-owned oil and gas company. FINMA ordered Julius Baer to change its remuneration and recruitment policies, and appointed an auditor to oversee the bank to ensure its compliance with anti-money laundering standards. In March 2021, FINMA lifted

3080-503: The US Department of Justice concerning its investigation of alleged money laundering and corruption involving officials and affiliates of the world soccer federation, FIFA . Julius Baer subsequently entered into a three-year deferred prosecution agreement with the DOJ & agreed to pay fines totaling over $ 79 million. On May 27, 2021, Julius Baer finalized the agreement with the DOJ, resolving

3168-475: The AuM to 251 billion francs ($ 258.2 billion). In July 2014, Julius Baer announced that it had purchased the private banking assets of Israeli Bank Leumi . In February 2008, Julius Baer Group sent cease and desist letters to Wikileaks and its domain registrar, Dynadot, resulting in subsequent legal action. This legal action was initiated after Wikileaks published documents related to about 1,600 clients with accounts in

3256-666: The Julius Baer employee-based JB Cares organisation and selected art museums in Switzerland. In 2020, JB Cares and the JB Foundation supported aid programmes in Lebanon following the accident in the port of Beirut on 4 August 2020. Since 2019, Romeo Lacher has been the president and chairman of the Julius Baer Foundation. Andreas Weinberg serves as vice president. Investment management Investment management (sometimes referred to more generally as asset management )

3344-453: The Streisand effect. Initially, the bank obtained an injunction prohibiting WikiLeaks from publishing specific documents, but this garnered little media attention. However, their overzealous second injunction seeking to shut down the entire WikiLeaks website triggered a global outcry. This excessive measure only served to draw more attention to the very information they wanted to suppress, as only

3432-486: The US from Bank of America. The 4th generation was involved with the leadership of the bank with Raymond Bär from 1988 until 2012, last as chairman of the board of Julius Baer Holding Ltd. Michael Bär joined the bank in 1992 and was active in various senior operating functions, last as a member of the group executive committee until 2005. As representatives of the family shareholders Mark Bär (1999–2005), Andreas Bär (2003–2005) and Beatrice Speiser-Bär (2003–2009) were members of

3520-541: The US or BI-SAM in Europe) compile aggregate industry data, e.g., showing how funds in general performed against given performance indices and peer groups over various periods. In a typical case (let us say an equity fund ), the calculation would be made (as far as the client is concerned) every quarter and would show a percentage change compared with the prior quarter (e.g., +4.6% total return in US dollars). This figure would be compared with other similar funds managed within

3608-526: The United States and less so in Europe. However, as of 2019, the lines were becoming blurred. Money management is used in investment management and deals with the question of how much risk a decision maker should take in situations where uncertainty is present. More precisely what percentage or what part of the decision maker's wealth should be put into risk in order to maximize the decision maker's utility function . Money management can mean gaining greater control over outgoings and incomings, both in

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3696-534: The United States, refers to both a firm that provides investment management services and to the individual who directs fund management decisions. The five largest asset managers are holding 22.7 percent of the externally held assets. Nevertheless, the market concentration, measured via the Herfindahl-Hirschmann Index , could be estimated at 173.4 in 2018, showing that the industry is not very concentrated. The business of investment has several facets,

3784-429: The acid test of fund management, and in the institutional context, accurate measurement is a necessity. For that purpose, institutions measure the performance of each fund (and usually for internal purposes components of each fund) under their management, and performance is also measured by external firms that specialize in performance measurement. The leading performance measurement firms (e.g. Russell Investment Group in

3872-411: The ban on large acquisitions for Julius Baer. The move was driven by a report by an independent auditor that supervised the implementation of the measures that FINMA ordered. Julius Baer said it welcomed the move and noted the "significant progress the bank has made in strengthening its company-wide risk management." Julius Baer, a Swiss bank, faced significant controversy stemming from its involvement in

3960-406: The bank signed a deferred prosecution agreement with the DOJ and agreed to pay a fine of $ 547 million. Acting Chief Executive Bernhard Hodler reacted to the agreement in a statement saying that "This important step confirms Julius Baer's approach to cooperating constructively with competent authorities and our commitment to fulfill our regulatory obligations and responsibilities." On 20 February 2020

4048-582: The bank. The main focus of the Julius Baer Foundation is youth, vocational training , recycling and wealth inequality. Projects that directly benefit the younger generation are sponsored in various ways. Set up in 1965 by Walter J. Baer initially for charitable causes in Switzerland, the scope has grown together with the expansion of the business to a global scale. Julius Baer Foundation works together with and supports among others Sistema B (Chile), Solafrica (Ethiopia), Swisscontact (Switzerland) and Plastic Free Planet (UK). It continues its traditional support of

4136-655: The board includes expertly overseeing speculation portfolios for the benefit of clients to accomplish their monetary objectives. This incorporates key resource designation, developing broadened portfolios, and effectively observing execution while relieving gambles. Speculation administrators use exploration and examination to recognize valuable open doors and pursue informed choices, guaranteeing portfolios line up with client targets and hazard resilience. In addition, successful investment management requires adherence to ethical standards, compliance with regulations, and effective communication with clients. The term investment management

4224-730: The board of Julius Baer Holding Ltd. Since its inception in 2014, the bank has been title sponsor of the FIA Formula E championship. The number of personnel by full-time equivalent grew from around 400 in 1980 to more than 2'000 in the year 2000 and further to more than 6'000 in 2020 when nearly half of them were employed in Julius Baer offices abroad. In July 2023, Julius Baer decided to refuse to work with clients domiciled in Russia. The bank began sending out letters to customers informing them that their accounts will be closed on December 31, cards and contracts will be cancelled. The letter states that "due to

4312-542: The board of Julius Baer Holding Ltd., and Rudolf Bär 1969 until 2005, last as member of the board of Julius Baer Holding Ltd. Hans Bär was succeeded as chairman by Thomas Bär 1996 until 2003. On 4 July 1970 Dr. Ernst Bieri, former head of the finance department of the City of Zürich joined as outside partner until 1990 as member of the board of Julius Baer Holding Ltd. Since 1980, the Bank began accepting non-family investors until it became

4400-467: The business. In some cases, institutions with minority holdings work together to force management change. Perhaps more frequent is the sustained pressure that large institutions bring to bear on management teams through persuasive discourse and PR. On the other hand, some of the largest investment managers—such as BlackRock and Vanguard —advocate simply owning every company, reducing the incentive to influence management teams. A reason for this last strategy

4488-421: The case, arguing against the injunction on the grounds of free speech and the public's right to know. Following the legal arguments and public backlash, the court, presided over by Judge White, dissolved the injunction on February 29, 2008. This decision allowed Wikileaks to restore its domain name and continue its operations. The court's decision was influenced by First Amendment concerns and the arguments raised by

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4576-501: The chief executive of Bank Julius Baer, killed himself on 4 December 2008 at the age of 52. Widmer's death was a significant event in the banking world, given his influential role and the prestige of the institution he led. Widmer joined Julius Baer in 2005 and was appointed CEO of the bank in November 2007. The circumstances of Widmer's death were surrounded by reports of suicide, though official details were not publicly disclosed. His passing

4664-514: The client is an institution or private individual/ family trust . Investment managers who specialize in advisory or discretionary management on behalf of (normally wealthy) private investors may often refer to their services as money management or portfolio management within the context of " private banking ". Wealth management by financial advisors takes a more holistic view of a client, with allocations to particular asset management strategies. The term fund manager, or investment adviser in

4752-468: The companies in which they hold shares (e.g., to hold managers to account, to ensure Board's effective functioning). Such action would add a pressure group to those (the regulators and the Board) overseeing management. However, there is the problem of how the institution should exercise this power. One way is for the institution to decide, the other is for the institution to poll its beneficiaries. Assuming that

4840-441: The companies via the voting rights the shares carry and the consequent ability to pressure managements, and if necessary out-vote them at annual and other meetings. In practice, the ultimate owners of shares often do not exercise the power they collectively hold (because the owners are many, each with small holdings); financial institutions (as agents) sometimes do. Institutional shareholders should exercise more active influence over

4928-613: The couple met with their Goldman Sachs banker at Julius Baer's headquarters and discovered significant discrepancies in their account balances. Their former advisor, Benjamin G. of Julius Baer, was later charged with embezzlement and sentenced to three years in prison in October 2023. The couple also filed civil lawsuits against Benjamin G. and Julius Baer, as well as a complaint with FINMA , the Swiss financial regulator, to investigate potential compliance violations and facilitation of money laundering by

5016-426: The current circumstances" the bank will no longer be able to offer services "that meet our standards". Julius Baer originally operated as a partnership and was incorporated on 27 November 1974 with a share capital of CHF 14.040 million, divided into 56,400 registered shares of CHF 100 each and 16,800 bearer shares of CHF 500 each. The company went public in 1980. The Baer Families relinquished control in 2005 converting

5104-616: The employment of professional fund managers, research (of individual assets and asset classes ), dealing, settlement, marketing, internal auditing , and the preparation of reports for clients. The largest financial fund managers are firms that exhibit all the complexity their size demands. Apart from the people who bring in the money (marketers) and the people who direct investment (the fund managers), there are compliance staff (to ensure accord with legislative and regulatory constraints), internal auditors of various kinds (to examine internal systems and controls), financial controllers (to account for

5192-800: The expense: 1. avoid any expense that appeals to vanity or snobbery 2. always go for the most cost-effective alternative (establishing small quality-variance benchmarks, if any) 3. favor expenditures on interest-bearing items over all others 4. establish the expected benefits of every desired expenditure using the canon of plus/minus/nil to the standard of living value system. These techniques are investment-boosting and portfolio-multiplying. There are certain companies as well that offer services, provide counseling and different models for managing money. These are designed to manage grace assets and make them grow. Wealth management , where financial advisors perform financial planning for clients, has traditionally served as an intermediary to investment managers in

5280-415: The firm again in 1896 when at the same time Joseph Michael Uhl and Julius Bär joined. In 1901, Julius Bär acquired the bank and remained as partner until 1922. Hans E. Mayenfisch joined the bank on 1 July 1913 as partner and was active until 1947. The sons of Julius Bär became partners as follows: Walter Bär on 1 October 1913 until 1947, Werner Bär in 1921 until his death on 2 February 1960 and Richard Bär, who

5368-479: The global fund management industry increased by 10% in 2010, to $ 79.3 trillion. Pension assets accounted for $ 29.9 trillion of the total, with $ 24.7 trillion invested in mutual funds and $ 24.6 trillion in insurance funds. Together with alternative assets (sovereign wealth funds, hedge funds, private equity funds, and exchange-traded funds) and funds of wealthy individuals, assets of the global fund management industry totalled around $ 117 trillion. Growth in 2010 followed

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5456-577: The heart of the investment management industry are the managers who invest and divest client investments. A certified company investment advisor should conduct an assessment of each client's individual needs and risk profile. The advisor then recommends appropriate investments. The different asset class definitions are widely debated, but four common divisions are cash and fixed income (such as certificates of deposit), stocks , bonds and real estate . The exercise of allocating funds among these assets (and among individual securities within each asset class)

5544-453: The independent private banks Ferrier Lullin, Ehinger & Armand von Ernst, Banco di Lugano, and the asset management house Global Asset Management (GAM) from the Swiss banking giant UBS AG , to become one of the largest independent wealth management firms in Switzerland. UBS acquired almost 21% of Baer's shares as part of the deal, but sold off its stake in May 2007 to fund a share buyback . GAM

5632-410: The influence of the business cycle. This can be difficult however and, industry-wide, there is a serious preoccupation with short-term numbers and the effect on the relationship with clients (and resultant business risks for the institutions). One effective solution to this problem is to include a minimum evaluation period in the investment management agreement, whereby the minimum evaluation period equals

5720-566: The institution (for purposes of monitoring internal controls), with performance data for peer group funds, and with relevant indices (where available) or tailor-made performance benchmarks where appropriate. The specialist performance measurement firms calculate quartile and decile data and close attention would be paid to the (percentile) ranking of any fund. It is probably appropriate for an investment firm to persuade its clients to assess performance over longer periods (e.g., 3 to 5 years) to smooth out very short-term fluctuations in performance and

5808-414: The institution polls, should it then: (i) Vote the entire holding as directed by the majority of votes cast? (ii) Split the vote (where this is allowed) according to the proportions of the vote? (iii) Or respect the abstainers and only vote the respondents' holdings? The price signals generated by large active managers holding or not holding the stock may contribute to management change. For example, this

5896-413: The institutions' own money and costs), computer experts, and "back office" employees (to track and record transactions and fund valuations for up to thousands of clients per institution). Key problems include: Institutions often control huge shareholdings. In most cases, they are acting as fiduciary agents rather than principals (direct owners). The owners of shares theoretically have great power to alter

5984-447: The intervenors and amici curiae. Subsequently, Julius Baer moved to dismiss the case on 5 March 2008, effectively ending the lawsuit. This outcome was seen as a significant victory for free speech advocates and set a precedent for how similar cases might be handled in the future, particularly those involving the publication of leaked documents on digital platforms. Julius Baer's attempt to silence WikiLeaks backfired spectacularly thanks to

6072-567: The investigation of the Bank’s role. In October 2023, the Financial Times published an investigation into alleged Julius Baer fraud. The article tells about the couple Gregory and Vera Mirlas who entrusted their wealth to the Swiss private bank Julius Baer through an independent wealth management advisor. Subsequently, they discovered a significant misappropriation of their assets starting in 2009. This alleged fraud came to light in October 2019, when

6160-485: The investment manager's investment horizon. An enduring problem is whether to measure before-tax or after-tax performance. After-tax measurement represents the benefit to the investor, but investors' tax positions may vary. Before-tax measurement can be misleading, especially in regimens that tax realised capital gains (and not unrealised). It is thus possible that successful active managers (measured before tax) may produce miserable after-tax results. One possible solution

6248-454: The linear combination of style indices that best replicate portfolio style allocation, and leads to an accurate evaluation of portfolio alpha. However, certain research indicates that internet data may not necessarily enhance the precision of predictive models. At the undergraduate level, several business schools and universities internationally offer "Investments" as a subject within their degree; further, some universities, in fact, confer

6336-545: The manager's qualifications. Some conclude that there is no evidence that any particular qualification enhances the manager's ability to select investments that result in above-average returns. But see also Chartered Financial Analyst § Efficacy of the CFA program re related research. Money management is the process of expense tracking, investing, budgeting, banking and evaluating taxes of one's money, which includes investment management and wealth management . Money management

6424-413: The manager's skill (or luck), whether through market timing , stock picking , or good fortune. The first component is related to allocation and style investment choices, which may not be under the sole control of the manager, and depends on the economic context, while the second component is an evaluation of the success of the manager's decisions. Only the latter, measured by alpha, allows the evaluation of

6512-515: The manager's true performance (but then, only if you assume that any outperformance is due to the skill and not luck). Portfolio returns may be evaluated using factor models. The first model, proposed by Jensen (1968), relies on the CAPM and explains portfolio returns with the market index as the only factor. It quickly becomes clear, however, that one factor is not enough to explain the returns very well and that other factors have to be considered. Multi-factor models were developed as an alternative to

6600-563: The nation’s first national municipal bond funds (Managed Municipal Bond Trust) and in 1981, MFS launched the country’s first globally diversified fixed-income fund (Massachusetts Financial International Trust-Bond Portfolio). In 1986, MFS offered the first closed-end, high-yield municipal bond fund to be traded on the New York Stock Exchange . In 1982, the company was acquired by Sun Life Financial of Canada . In 1998, MFS Chairman and Chief Executive, A. Keith Brodkin died, causing

6688-486: The notion of rewarding risk and produced the first performance indicators, be they risk-adjusted ratios ( Sharpe ratio , information ratio) or differential returns compared to benchmarks (alphas). The Sharpe ratio is the simplest and best-known performance measure. It measures the return of a portfolio over above the risk-free rate, compared to the total risk of the portfolio. This measure is said to be absolute, as it does not refer to any benchmark, avoiding drawbacks related to

6776-466: The public and later expanded to $ 14 million in assets over the next five years. During the stock market crash of 1929 the fund survived an 83% loss and went on to create a second fund in 1934. By 1959, the Massachusetts Investors Trust fund had become the largest mutual fund in the United States. In 1969, MIT was reorganized as Massachusetts Financial Services (MFS) to reflect the firm's broadened scope of products and services. In 1976, MFS offered one of

6864-466: The reasons why the manager can produce above-average results. Ethical or religious principles may be used to determine or guide the way in which money is invested. Christians tend to follow the Biblical scripture . Several religions follow Mosaic law which proscribed the charging of interest . The Quakers forbade involvement in the slave trade and so started the concept of ethical investment . At

6952-498: The role as CEO for the Julius Baer Group Ltd. and Bank Julius Baer & Co. Ltd. In 2011, Julius Baer became one of a dozen Swiss banks to come under U.S. federal investigation for allegedly aiding US citizens in committing tax evasion. The bank subsequently chose to engage with federal investigators, cooperating with the US Department of Justice investigation and accepting responsibility for its conduct. On 4 February 2016,

7040-466: The share capital into a single class of registered shares all quoted at the SIX Swiss Exchange. Today, MFS Investment Management is the single biggest shareholder with nearly 10% of voting rights. In 2020, Julius Baer announced it plans to slash 300 jobs, a decision which is a part of the company's CEO's three-year plan to improve the bank's profit margins. In September 2005, Julius Bär acquired

7128-639: The skill of a successful investment manager resides in constructing the asset allocation, and separating individual holdings, to outperform certain benchmarks (e.g., the peer group of competing funds, bonds, and stock indices). It is important to look at the evidence on the long-term returns to different assets, and to holding period returns (the returns that accrue on average over different lengths of investment). For example, over very long holding periods (e.g. 10+ years) in most countries, equities have generated higher returns than bonds, and bonds have generated higher returns than cash. According to financial theory, this

7216-543: Was demerged as a separate company in October 2009. The companies of the group are consolidated within Julius Bär Gruppe AG, whose shares are listed on the SIX Swiss Exchange . In November 2012, Julius Baer and Milan-based Kairos Investment Management SpA (‘Kairos’) announced that they had reached an agreement for a cooperation to jointly create a leading onshore wealth management player in Italy . Julius Baer’s Italian SIM

7304-462: Was a physicist became a silent partner in 1922. After his death in 1940 he was succeeded by his widow Ellen Bär. The members of the 3rd generation became active in the bank with Hans Bär on 21 August 1947 until 1996, last as chairman of the board of Julius Baer Holding Ltd, Nicolas Bär on 22 September 1951 until March 1993, last as Chairman of Bank Julius Baer & Co.Ltd, Peter Bär on 1 November 1955 until his death on 11 November 1998 last as member of

7392-498: Was exposed. When an individual disputed their inclusion in the leaked documents, WikiLeaks appended a caveat attributing the information to "three independent sources." This, however, turned out to be a fabrication, further highlighting the complexity and potential inaccuracies within the leaked data. On 17 January 2011, Rudolf Elmer provided Wikileaks with the alleged bank account details of 2,000 individuals and corporations from three financial institutions, including Julius Baer. Elmer,

7480-474: Was integrated into Kairos and, simultaneously, Julius Baer acquired 19.9% of Kairos. All Italian wealth management activities of the two groups run under the name Kairos Julius Baer. Julius Baer acquired Merrill Lynch ’s International Wealth Management business (IWM), based outside the US, in August 2012, for 860 million Swiss francs ($ 884.8 million). The deal grew Julius Baer's assets under management by 40%, raising

7568-430: Was mourned deeply within the industry, with Julius Baer's Chairman Raymond J. Baer expressing condolences and noting Widmer's significant contributions to the bank. Widmer was succeeded by Hans de Gier, former CEO of Julius Baer Group, who assumed responsibilities on an interim basis. Hans de Gier, the former chief of Julius Baer Group, assumed Widmer's responsibilities for the interim. In May 2009, Boris Collardi assumed

7656-413: Was originated by Markowitz (and many others). Effective diversification requires management of the correlation between the asset returns and the liability returns, issues internal to the portfolio (individual holdings volatility), and cross-correlations between the returns. There is a range of different styles of fund management that the institution can implement. For example, growth , value, growth at

7744-527: Was sufficiently high to reward the risks taken; how they compare to their peers; and finally, whether the portfolio management results were due to luck or the manager's skill. The need to answer all these questions has led to the development of more sophisticated performance measures, many of which originate in modern portfolio theory . Modern portfolio theory established the quantitative link that exists between portfolio risk and returns. The capital asset pricing model (CAPM) developed by Sharpe (1964) highlighted

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