The GIMS framework is an acronym for Gate, Investments, Monitoring and Surveillance. This framework defines the guardrails on key risk parameters for the funds’ investments to aid investors in optimising returns to achieve their financial goals.
When it comes to investing in fixed income, finding the right balance between generating returns and managing risk is crucial. How do experts tackle this challenge and how does this impact everyday investors? Let’s explore!
Understanding risk and rewards
Managing investments involves understanding how much risk you can handle and whether the returns you’re getting make it worthwhile. One investment management tool is the GIMS framework. The GIMS framework is an acronym for Gate, Investments, Monitoring and Surveillance. This framework defines the guardrails on key risk parameters for the funds’ investments to aid investors in optimising returns to achieve their financial goals.
During the Gating process, a team of research analysts evaluates the quality of the investments available before onboarding them. They look at the probability of stress in these investments and their ability to withstand unpredictable situations. During the investing process, fund managers select portfolios that have a reasonable chance of generating returns while controlling risk. Regular surveillance along with independent monitoring of the portfolio is carried out to take corrective actions in case of any adverse development in the portfolio.