Asset management
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Bank of Moscow offers individual assets management for our clients. More and more investors turn their heads towards the securities and derivative securities markets. Investing into these markets promise better profits but, as it usually is, also raises risks. You can significantly reduce risks by transferring your assets to professionals under trust management. It’s a known fact that it’s easier for a professional to assess all market factors and make an investment decision. One of the major advantages of this service for the Client is the opportunity to place their funds without spending money on training and maintaining personnel, creating the necessary infrastructure for tracking market trends and accounting operations. Trust management is available for both private and corporate clients, insurance carriers and pension funds. The essence of trust management is that one side (trustor) transfers his money, securities or other assets to another side (trustee) for a certain period of time to manage on behalf and in the interest of the trustor or his authorized representative (beneficiary) on various markets in order to raise profit. The property rights for the assets are not transferred from the trustor to the trustee. Trust management is performed on behalf and in the interest of the trustor or his authorized representative (beneficiary) without incorporating the property of the said trustor with the property of the trustee or other persons, i.e. the assets of the client and the assets of the trustee are accounted for on separate balance sheets. Purpose and priorities of trust managementThe main purpose of trust management is maintaining and increasing the client’s assets while maintaining optimal risk level. The main management principles are: reliability, safety, liquidity, profitability and diversification. What Bank of Moscow can offer to fulfil the purpose of trust management:
Objects of trust managementBank of Moscow invests the clients’ funds in various financial instruments, both on the stock market and in the off-board segment.
Bank of Moscow CommissionClients pay the Bank of Moscow a two-fold commission for managing their assets, commission for management and commission for success. Commission for management is calculated as percentage from the average market value of the client’s assets during the reporting period and amounts to 0.75 to 2.0 percent per annum. Commission for success is calculated as percentage from the value growth of the client’s assets during the reporting period and amounts to 10 to 20 percent per annum. Manager’s commission is computed and charged upon completion of each reporting period. Minimum investment amount is 100,000 USD or the equivalent in roubles, minimum period of investment is 6 months. Investment thesis and main investment strategiesWhen signing a trust agreement with the client the personal manager agrees principles on which the investment portfolio will later be formed. Investment theses is the document which defines the purposes of trust management, actions performed by the Bank of Moscow during trust management, a list of proper objects of investment, and assets structure, which should be maintained during trust management. Clients choose the most appealing existing strategy or, in cooperation with the personal manager, work out an individual investment strategy depending on their purposes, preferred level of income and risks they are ready to take. Individual trust management program of the Bank of Moscow offers 4 basic and 3 specialized investment strategies, which allow an investor to chose the most appealing risk-profitability ratio depending on the amount of investment, time horizon and risk tolerance. Basic investment strategiesBasic investment strategies are designed for investors with assets from 100 thousand USD who are ready to invest their fund for at least 6 months. Main objects of investments – shares and bonds from Russian issuers. Risk management is realized by limiting the amount of investment in shares. More... Conservative strategy. Balanced strategy Strategy of growth Aggressive strategy Specialized investment strategies are designed for investors with assets from 200 thousand USD. (Small Cap, «high-yield bonds», «capital maintenance»). These strategies are most effective is the assets are placed for at least 2-3 years. More... Small Cap Strategy Investments in high-yield bonds Investment portfolio of this kind has relatively low market risks (risks of rapid interest increase) since the securities comprising this portfolio are characterized by short duration. Credit exposure of this portfolio is relatively high, however, it can be diminished to the acceptable level by high diversification – having several issuers in the portfolio with each issuer’s share not exceeding 1-2%. In this case possible default of one issuer will not have too much influence on the value of the portfolio. Average expected profitability of such portfolio at current APRs is 8-15% per annum (depending on market performance). Possible losses in the course of a year – not more than 5%. Risks for this portfolio (probability of losses) is considered relatively low. Since the securities in the portfolio have low liquidity, it is recommended to invest for at least 1-2 years. To achieve high diversification of the portfolio in order to diminish credit exposure, it is recommended to invest not less than 200 thousand USD. More... Maintaining Capital Strategy Capital maintaining strategy implies investing the majority of monetary funds into AAA bonds (Federal loan bonds, Bank of Russia bonds, government owned companies – Gazprom, Russian Railways, Residential Mortgage Agency), which are in essence risk-free securities. These instruments are purchased before redemption, i.e. there is no market risk for this part of the portfolio. Highest reliability bonds receive investments in the amount which by the time of redemption will comprise 100% of the initial value of the portfolio. The remaining funds are invested in high-profit instruments, mostly shares. Profitability of this part of the portfolio will determine overall profitability of the portfolio. However, even if this part will be fully lost as a result of unsuccessful operations (for instance, companies bankrupt and the value of their shares falls to zero) it won’t lead to losses for the client. In this case the portfolio will have zero income. But if the operations with the high-risk part of the portfolio will be successful, the expected overall profitability of the portfolio may amount to an average of 5-15%. To increase overall profitability of the portfolio it is intended to perform REPO operations against high-reliability liquid bonds. Since bonds are purchased before redemption, this Strategy implies investments for a strictly limited period of time. It is recommended to realize this investment strategy during the period of 2 to 5 years. Minimum amount of investments to form a portfolio following this strategy is 200 thousand USD. More... Informational support of the Bank of Moscow clientsBank of Moscow clients can receive information about current market situation on the Bank of Moscow webpage (www.bm.ru) and via email. Additionally, the clients receive analytical support. They receive the following information via email:
ContactsManaging Director of the Assets Management Department Sales and Development Administration Attention! Any documents submitted to the Bank must be completed in Russian. |
