The risk, related to investment in financial assets is the possibility that the achieved return may be different from the expected return. In general, the risk is the probability to realize loss from some or even from all investments included in the investor’s portfolio.
"UBB Balanced Fund" invests in assets bearing low to medium level of risk for the shareholders and maintains such a portfolio structure in compliance with the restrictions imposed by the Articles of Association, POSA and the sub delegated legislation on its application.
Managing “UBB Balanced Fund”’s portfolio and dealing actively risk management, Management Company observe and analyse all kinds factors, which can affect to the funds return. The main risks are widely described in the Risk Management Rules.
According to the methodology approved by the Bulgarian Association Management Companies, as a measure for the risk is accepted the index “standard deviation”. The more great values, the more risky investment. Standard Deviation is calculated on the weekly base of data for NAV/ 1 share for the last calendar year after which it is annualized.
Standard deviation for NAV/1 share of UBB Balanced Fund (annual)
Risk measures
31.01.2012
Standard deviation (σ)
6.31 %
Beta coefficient (β)
0.50
Sharpе ratio
- 1.10
Tracking error
6.25 %
Standard deviation (σ) – an universally perceived measure of the risk. A high standard deviation indicates that the investment is riskier. It is calculated on daily data of NAV/1 share for the last calendar year and than annualized.
Beta coefficient (β) – describes how the return of an investment is correlated to the return of the capital market measured through the equally weighted return of the indexesSofix and Treasury Bond Index -TBI. In its calculation are used data for the last calendar year.
Sharpе ratio – describes the return realized excess the free-risk return for a share of risk taken. For risk-free return is accepted average overnight Sofibor for last calendar year. Sharpe ratio is calculated by extracting the risk-free return from the fund’s return for the last calendar year and than divide the result to the risk, measured by the standard deviation.
Tracking error – a measure of how closely a portfolio return follows the index to which it is benchmarked. It measures the standard deviation of the difference between the portfolio and the equally weighted return of the indexesSofix and Treasury Bond Index -TBI, calculated on daily data of NAV/1 share for the last calendar year and than annualized.
Important: UBB Asset Management informs the investors that previous performance of mutual funds is not necessarily related to future performance. The value of the units/shares and the income generated by them may decrease. Earnings are not guaranteed and there is a risk for the investors not to be able to return the initially invested funds in their full value. The investments in mutual funds are not secured by a guarantee fund established by the state or by any other type of guarantee.
