Mon, 23 Apr 2012 16:26:00 +0400
News of investment companies. A lot of investors care about safe and effective maintenance and growth of their savings. Opportunities provided by investment funds are absolutely limitless and bear certain risks. So, what investment funds are and what do investors find attractive about such kind of investment?
What makes investment funds attractive to investors?
Let us clarify the definition of investment in global practice. Investment is the action of placing one’s monetary funds into any possible assets with the aim of getting additional return. Objects for investments and potential sources of income include money (currency, deposits, and certificates), corporate shares, investment companies (collective investments), bonds, real property and land, precious metals: gold, silver, and other goods.
Transactions with the abovementioned categories of investments require considerable sums, experience, and knowledge. If you are an active, experienced trader or businessman, this article is not for you.
We are appealing to people that have their main occupation, gain regular profit from it, and are going to regularly invest a part of it. The “golden rule” of investment and advice from the wise says “keep 10% of earned money for yourself.” Money, shares, and investment funds seem to be the most attractive and the easiest to access.
Should one allocate significant funds to bank deposits, UITs?
Inflation – money’s enemy No. 1. Ukraine is among the countries with developing economies, which means that it is unprotected from inflation. Excess inflation requires excess return from investment in order to maintain initial funds. Money placed under a matrass bears no protection either from inflation, or from physical loss. Consequently, keeping money under a matrass is meaningless. Therefore, investment is the only way out. The first thing that comes to one’s mind is a bank deposit. It certainly is better, but far from ideal:
■ traditional banking rates hardly cover inflation. Below follows a chart of dynamics of consumer inflation index in Ukraine during 2000-2011; to compare, there also is a chart of dynamics of Ukrainian banks annual rates. One should keep in mind, though, that inflation rate is provided on the basis of information from the Ministry of Finance of Ukraine. For example, many experts suppose the official inflation rate of 4.6% in 2011 is fiction. In their opinion, this number is to be multiplied 5 times in order to receive true dynamics of consumer prices in the country. This is the first reason why it is not worth placing one’s savings in banks.
■ commercial banks go bankrupt more frequently than investment funds (ICI) or UITs. Let us give certain examples. In 2010 in Russia 53 banks were deprived of licenses. In 2011 the banking Mecca Switzerland faced similar problems. A number of large banks that were unable to stand European financial crisis had to be urgently saved. The same year 92 American and 21 Ukrainian banks went bankrupt. Isn’t it worth taking a thought?
It appears that the risk is high, and the profit is small. Let us now turn to collective investment. Return here is usually higher, but the result is less predictable. Below follows a return rating of fifteen Ukrainian investment funds during 2011. In this reference, international company Manors Investment is at the top of the rating with the result of 93.6% per annum. As you can see, 12.65% profit per annum is the maximal achievement of traditional UITs. There also are structures that have shown negative return, which means that their clients’ assets have reduced.
Return rating of 15 Ukrainian investment funds
Clients of Manors Investment have earned the average profit of 43% during 2011. Their deposit of $1000 at the beginning of the year has turned into $1431 by the end of it. Moreover, the most conservative deposit of Manors Investment “Classical” managed to generate the profit of 6.52% for its clients during the first two months of 2012: 3.17% from deposit in January and 3.35% – in February.
■ return. In 2010 the average return of traditional investment funds slightly exceeded official inflation rate and amounted to plus12.7% for open ICIs, plus 14.8% for interval ICIs, and plus 32.5% for closed non-venture ones. This data is provided in the report of Ukrainian Association of Investment Business (UAIB). Manors Investment traders and management have provided the profit of 42% to investors, and of 84% to the Company itself.
According to official data, the average return from collective investments during 2009 has amounted to 21.26%. Let us remind that this was the period of fantastic recovery of price of all assets, which followed a decline during the second half of 2008. This year American stock index S&P has raised almost by 37%, and the increase of domestic stock market has amounted to over 90% (PFTS index). The result of Manors Investment proved most modest – 17.1% of profit to its clients. It is worth mentioning that this was a starting year for the company’s project, for it was moving along unbeaten track. 2008 was characterized by negative return of UITs, which amounted to 30.6%.
This is not surprising, taking into consideration market crash and limited maneuvering of traditional investment funds. Consequently, activity of directors and risk managers of ICI certainly needs improvement. In this reference, it is worth mentioning that management of your capital in UIT has not been cancelled, no matter what the result of its activity is. In other words, there is no certainty at low return.
It is not a secret that for Ukrainian traders and investors the process of entering foreign markets is closely connected with difficulties due to legislation. As a result, illegal or semi-legal means are widely used, with all consequences. Ukrainian legislation provides too little opportunities for traditional UITs to be able to generate high and steady return. In such circumstances Manors Investment seems to be a good alternative.
Manors Investment company is very young, as it has been functioning for 3 years only, but has already reached impressive results. The company was founded in 2007. The project used to be called investment and educational club “Perspective” that taught and provided an opportunity to do new and rather unusual for that time business – trade at stock exchange. Its participants fancied the activity of the club and by the end of 2008 the client’s base was several times larger. In general, the ball was set rolling.
Manors Investment: What are the benefits of trust management?
The principle of PAMM-account (Percentage Allocation Management Module) served the basis for the club’s activity and later for Manors Investment company. Consequently, a certain form of collective investment and trust management is involved. Investments are effected on the basis of broker company ManorsGroupBroker. Therefore, Manors Investment is an alternative to investment funds and UITs. It is even more than alternative, for it is an totally new principle that brings totally different profit. Let us remind that last year’s return of Manors Investment proved to be 7 times higher than the one of most profitable ICI Raiffeisen Bank Aval (second position in the rating).
As informed by Representative of Manors Investment Vladimir Yakubovskiy, the company’s investors are provided with an opportunity to insure their investment from loss, which guarantees certain profit despite the operation results of separate traders. In other words, investors may not have negative return. This is guaranteed by the company’s.
Vladimir Yakubovskiy explained that Manors Investment has formed a range of deposits, which is aimed at different categories of investors, different appetite for profit, and different risk management. For example, there is “Classical” deposit, which is characterized by 100% warranty of safeguard of assets. In such a case, traders take the risk of losing only their funds at the account. Such option is appealing to conservative clients. “Dynamic” deposit is the opposite; it is characterized by high return, but there are risk limitations.
In this reference, as stated by Vladimir Yakubovskiy, high profit of the company as a whole enables it to perform its obligations before clients even if one trader or another has had an unsuccessful trading period. 6 months is the minimal lead time on investment; however traders may take their profit every month without any penalty.
According to Manors Investment, such variety of offers enables clients to create their own diversified deposit portfolio, which will include highly-profitable and conservative investment tools.
“Market Leader” Magazine and Masterforex-V Trading Academy hold a questionnaire at forex forum for traders and investors: Can investment funds be considered the best alternative to banks?
- no, bank deposit is safer;
- yes, investing in investment funds are better;
- it is better to keep money at home.
You are free to discuss this article here: forum for traders and investors
As FX traders become more sophisticated, the FX industry evolves as well. Client-oriented Forex brokers come up with innovative solutions for more comfortable and efficient trading. This includes improving trading conditions and even creating new types of trading accounts.
These days, more FX brokers offer their clients swap-free accounts. What are the benefits and advantages of such accounts? Can we count on more substantial profits while making use of them? The expert team of an FX company named Orbex helped us to answer these questions.
As you know, summertime is a time for vacation, which means Fx traders can rarely find excellent trading opportunities amid flat markets and decreased volatility and liquidity. Less volatility means less substantial profits. Still, you can benefit from trading major news or events.
According to the data published by the U.S. Department of Commerce, the sales of residential property in the USA increased by 2.2% in May 2015 relative to the same figures in April 2015. In absolute figures, the index increased up to 546 000 home sales y/y.
The retail sales figures coming from Canada do not reassure investors. In April 2015, they showed a sharp decrease. These poor performance only added fuel to the fire of all those difficulties the Canadian economy faced in Q2 2015. This seems to be the key reason why consumer spending is still at its lows.
The Australian economy is still at the stage of completing the period of high growth rates. This is what the IMF thinks on he matter, Market Leader reports. The experts warn the Reserve Bank of Australia about the necessity of decisive steps aimed at easing the central bank’s monetary policy in the near future if the economic situation in the country cries for it.
According to Insee, which is the French officer national statistics, the French GDP growth amounted to 0,6% in Q1 2015 relative to the same figures a 12 months before. It should be noted that these are the strongest GDP figures France has shown since 2013, Market Leader reports.
Market Leader reports that the Bank of Japan expects an industrial production decline in April-June 2015 after 3 months of positive dynamics amid weak consumption figures coming from Asia.
The industrial production output increased by 1,5% in Q1 2015 as opposed to Q1 2014. This is an indication that the Japanese economic growth is accelerating. By the way, Japan is the world’s 3rd biggest economy.
What is the difference between FX trading and investing in gold, diamonds, residential property or even making bank deposits? The difference is that FX trading is all about high yields, which can be dozens, hundreds or even thousands of times bigger than you expect to get from those conventional investment… The thing is that this is a risky business and in order to succeed in it, you absolutely need to know the techniques and methods of generating those stellar profits over the long term.
The 4th month of testing the innovative auto-copying system by pro-rebate.com is underway. Now it is time to look at the updated stats for changes that took place over the reporting period.
According to pro-rebate.com and Masterforex-V Academy, the 50 most successful traders managed to show the collective profit of more than 36 000 points over the first 2 weeks of June! It is interesting to note that the TOP 10 collectively gained 11571 points or 32% of the overall profit. The traders rated 11- 20 gained 8018 points or 22% of the overall profit.