Markaz Capital Preservation Portfolio

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Markaz Capital Preservation Portfolio

Investment Strategy

Without any promises or any guarantee by the Portfolio Manager to GB and its Clients, and with applying a dynamic asset allocation model using Constant Proportion Portfolio Insurance ("CPPI"), the Portfolio seeks to provide GB and its clients an opportunity to invest in the Kuwaiti equity market with reduced volatility by attempting to limit any downside to 10%, while providing reasonable participation on the upside.

Investment Policy

  • The Portfolio will only invest in:
    • Cash and cash equivalents (i.e. Fixed Deposits with Kuwaiti banks)
    •  Markaz Fund for Excellent Yields "Mumtaz".
  • Allocation of investments between "Mumtaz" and cash & fixed deposits will be driven by the CPPI model, with weekly re-balancing.
  • Through the use of a CPPI as an investment strategy, the Portfolio Manager will, on a best effort basis but without any promises or guarantees, aim to preserve 90% of the invested capital.
  • Prevailing macroeconomic environment in terms of economic growth, oil price levels, political stability, government spending, and prevailing financial market environment in terms of valuation level, volatility, and liquidity, among others would be key inputs towards decision making (including rebalancing).
  • Why Markaz Capital Preservation Portfolio Service?
  • Historically, Kuwait market has had a relatively high risk-adjusted performance, making it one of the most attractive markets in the Gulf Region.
  • Over the past few years, however, the Kuwait Stock Exchange has underperformed against other emerging markets and has demonstrated a high level of volatility.
  • Without any promises or guarantees, MCPP will attempt, on a best effort basis, to limit the downside to 10%, while applying the CPPI strategy.

Back-testing

We have back-tested our CPPI model over the past five (5) years (as of September 2010), which include both bull and bear markets. The results of this back-testing indicate a likelihood of achieving the Portfolio‟s investment objectives of preserving gains while limiting the downside. However, past simulated performance is not a guarantee or promise of any future performance.

Summary of Terms

  • Term of the Portfolio: Open-ended
  • Minimum Contribution: Seventy Five Thousand Kuwaiti Dinars (KWD 75,000); thereafter in multiple of One Thousand (KWD 1,000).
  • Contributions: Quarterly, with seven (7) Business Days-notice
  • Entry Fee: 2%
  • Withdrawals: One year lock-up from each Contribution date; thereafter, monthly withdrawals with seven (7) Business Days‟ notice.
  • Withdrawal Fee: 0%
  • Management Fee: 1% pa on the amount invested in the Portfolio. The management fee will be accrued monthly on average daily balance and payable in arrears on a quarterly basis. It will be deducted from the Portfolio.
  • Asset Allocation: Weekly rebalancing of the cash / equity allocation.

Disclaimer

This document is not an invitation to subscribe the Portfolio. Investments in portfolios are based on the relevant portfolio management agreement and the relevant portfolio strategy. At all times, prospective investors considering an investment should carefully review such investment‟s terms and conditions, strategy and investment approach, operations, applicability of taxes, fees, expenses, risks of investing and review the performance over time. Investors should note that returns from such investments or portfolios may fluctuate. Investors should be able and willing to accept a total loss of their investment in any portfolio.
NO REPRESENTATION OR WARRANTY, EXPRESSED OR IMPLIED, IS GIVEN OR MADE, BY THE PORTFOLIO MANAGER, WITH RESPECT TO THE RESEARCH AND ANALYSIS PRESENTED THEREIN.
NO REPRESENTATION OR WARRANTY, EXPRESSED OR IMPLIED, IS GIVEN OR MADE, BY THE PORTFOLIO MANAGER, WITH RESPECT TO THE FUTURE PERFORMANCE RESULTS.
PROSPECTIVE INVESTORS SHOULD CONSULT THEIR OWN PROFESSIONAL ADVISORS AS TO THE SUITABILITY, LEGAL, TAX AND ECONOMIC CONSEQUENCES OF AN INVESTMENT IN A PORTFOLIO.
 

For more information, these files are available for downloading:

Markaz Capital Preservation Portfolio Presentation Download
Markaz Capital Preservation Portfolio Brochure Download
 Markaz Capital Preservation Portfolio Application form Download