Investment Process Alignment with Asset Manager Code

Medium Asset Manager Code Investment Process

Emma is the Chief Investment Officer at a mid-sized asset management firm that specializes in equity investments. As part of the firm's adherence to the CFA Institute's Asset Manager Code, she is responsible for ensuring that the investment process is efficiently designed to facilitate the generation of added value for clients.

Recently, Emma has been reviewing her team's investment process and discovered that some analysts are relying significantly on historical performance data of certain stocks without adequately considering current market conditions or new macroeconomic factors. This method is becoming a point of concern for both compliance and ethical reasons.

In light of these findings, Emma is contemplating whether the team's reliance on historical performance data aligns with the Asset Manager Code's principles regarding the investment process. Which of the following choices best describes the key investment process guideline she should consider?

Investment strategies should rely primarily on historical performance data as it provides a reliable basis for future returns.

Investment processes must ensure that decision-making incorporates both qualitative and quantitative analysis relevant to current market conditions and client investment objectives.

Investment analysts should focus solely on quantitative models to minimize subjectivity in their analysis.

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