Heroes of Ukraine

«Market Leader» - news and previews making you rich.

Saturday, 24 March 15:25 (GMT -05:00)

Foreign exchange market

Investment Funds: Burden or Reliable Protection from Inflation?

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


Add to blog
Got a question? – Ask it here »

Masterforex-V Tells You What You Don’t Know About Bitcoin

How do you treat Bitcoin and other cryptocurrencies? Usually, those who ask you this question expect you to be either pessimistic or optimistic on the future of digital currencies, ICO and blockchain.

Publication date: 23 March 11:27 AM

Google Bans ICO and Cryptocurrency Ads

A couple of days ago, the top management of Alphabet Inc. announced that Google would ban any ICO and cryptocurrency ad campaigns starting from June 2018. On top of that, they would toughen the requirements for advertising other risky financial products, including binary options.

Publication date: 18 March 05:54 AM

Both Gold and Dollar Go Down in Advance of Fed Meeting

Interestingly enough, despite having a negative correlation, both the U.S. Dollar and gold started going down in value against other majors earlier today. International experts assume that there are several factors pressing down these assets.

Publication date: 16 March 04:07 AM

Tillerson Gets Fired, Dollar Responds with a Drop

 International investors are concerned about Donald Trump’s decision to fire another high-ranking politician from his administration. This time it was Rex Tillerson. He used to serve as the U.S. Secretary of the State, which means he used to be responsible for the United States’ foreign affairs. Later on, Donald trump tweeted that he was going to make Mike Pompeo the next Secretary of the State. For those of you who don’t know, Mike Pompeo used to serve as the Director of the Central Intelligence Agency.

Publication date: 15 March 04:01 AM

China's Central Bank Is Skeptical About Cryptocurrencies

The People's Bank of China has been very skeptical (even critical) about cryptocurrencies. This is confirmed by the statement recently made by the central bank's president.

Publication date: 12 March 07:43 AM

Masterforex-V EXPO Names World's Best Forex Brokers for Beginners in February 2018

At some point in their career, each and every forex trader out there faces the same challenge - choosing the right forex broker. This holds especially true for beginners just getting their feet wet in the forex trading environment. Basically, their future performance will depend on that choice. The thing is, forex brokers may differ in a number of aspects, including the trading conditions they offer their clients.

Publication date: 12 March 07:17 AM

Bitcoin Quit Long-Term Correction

At this point, Bitcoin is trading around a major area of resistance. Having overcome it, the cryptocurrency will go further up, some experts believe.

Publication date: 06 March 02:00 AM

Bloomberg Intelligence Predicts Bitcoin Crash Down To $900

According to some experts working for Bloomberg Intelligence, the BTC exchange rate may crash all the way down to 900 dollars per 1 Bitcoin in the near future. They say this may happen because of decreased trading volume and bearish market sentiment.

Publication date: 05 March 03:51 AM

Bitcoin Is Above $9000, Litecoin Is Above $200

The cryptocurrency market keeps on recovering after the January crash. The current market cap is above $450 billion, with over $20 billion gained over the last 24 hours. Unlike other cryptocurrency market reviews, we are not going to start this one with Bitcoin, especially as it makes up for 34,9% of the total market share (used to be over 50%).

Publication date: 05 March 03:46 AM

Bitcoin Exchange Rate Drops Below $9000

Earlier today, the BTC exchange rate continued its way down to new local lows. In particular, it temporarily dove below the psychological threshold of 9000 dollars per 1 BTC. According to Coinmarketcap, the current local low is 8720 USD/BTC.

Publication date: 02 February 03:41 AM