classic mandate Discretionary Portfolio Management

Transcription

1 classic mandate Discretionary Portfolio Management

2 the classic mandate: investing in individual equities and/or bonds investing is more challenging and time-consuming than ever If you are not willing, able or permitted to manage your own assets, but still want to be absolutely sure your assets are in good hands, then Discretionary Portfolio Management is the solution for you. Simply leave the management of your assets to the professionals at ABN AMRO. One of our Discretionary Portfolio Management services is the Classic Mandate. an actively managed portfolio If you prefer a traditional approach to portfolio management, the Classic Mandate could appeal to you. The Classic Mandate consists mainly of investments in individual equities and/or bonds, which are managed actively on the basis of ABN AMRO s investment outlook. The portfolio is supplemented with specific investment funds. Your portfolio is also dynamically managed: in order to actively respond to market opportunities, investments may be made in alternative investment categories. These include indirect property, guarantee constructions, hedge funds and convertible or highyield bonds. equities for capital growth Under the Classic Mandate, the risks of investing in equities are spread as widely as possible, using a model-based approach. Companies are selected after a detailed fundamental and quantitative analysis, which focuses on four aspects: the valuation of a company (share price), the quality of a company (balance sheet ratios and profitability), technical analysis (quality of share price trend), and the opinions of analysts with proven track records. bonds for risk reduction Safety and certainty are highly important. This is why the emphasis of fixed-income investments in every risk profile is on bonds with high credit ratings. By opting for various durations, government bonds and corporate bonds via specialist investment funds, the risks in your portfolio are spread as widely as possible. A strict rule is that any additional return must offset the additional risk. And foreign currency investments are limited to protect you from fluctuations in exchange rates.

3 a transparent portfolio that suits your needs The Classic Mandate allows you to instruct the portfolio managers of ABN AMRO to manage your assets in line with agreed principles and aims. The composition of your portfolio is tailored to your personal circumstances and objectives, with a specific focus on such questions as: what are your financial aims, what are your available financial reserves and what is your attitude towards risk and what is your investment experience? The answers to these questions determine your risk profile, which is the key guideline in compiling your investment portfolio. The table indicates which risk profile suits a specific portfolio return target, investment horizon and risk appetite. It also shows the bandwidth for investing in variable income securities for each risk profile. risk profile bonds conservative balanced bonds balanced equities growth equities return target 4% 5% 6% 7% 8% 9% investment horizon 2 years 4 years 6 years 8 years 10 years 12 years risk appetite low low average average high high variable income bandwidth * 0% 10-40% 25-55% 35-75% 50-90% % * Variable income: all securities that cannot be classified as liquidities or fixed income securities, such as equities, hedge funds, indirect property, options and futures. aggressive or defensive The rule with investing is: the more risk, the greater the expected return. A large percentage of equities in the portfolio raises the expected return as well as the risk of sharp price fluctuations. We call this an aggressive portfolio. Aggressive portfolios can show sharp upward and downward price fluctuations in the short term. If you prefer to avoid such severe fluctuations, a defensive portfolio is more suitable for you. In this case, a larger component will be invested in bonds and liquidities. This usually offers more certainty, but the expected long-term return is lower. costs Asset management via the Classic Mandate means you can choose between paying an annual fee with a variable cost component or an all-in fee. In addition, the investment funds charge management fees. These are deducted from your returns on the investments. Finally, dividend tax is withheld where applicable. You can terminate your Classic Mandate free of charge at any time.

4 annual management fee with a variable cost component Each year we charge a fee of EUR 3,000 plus 0.30% (excl. VAT) over the value of the invested assets. This fee is calculated based on the volume at the end of each quarter and is charged quarterly. Alongside this annual management fee, the normal costs for investment services are charged, including transaction charges and custody fees. And if applicable, we will withhold dividend tax. This cost structure is possible for portfolios worth at least EUR 1,000,000. all-in fee An alternative option is to pay an all-in fee over the value of the managed assets, with a minimum amount that depends on the profile you select: all-in fee per year (excl. VAT) over the managed assets Bonds 1,00% (min. EUR 5,000) Conservative 1,00% (min. EUR 5,000) Balanced bonds 1,25% (min. EUR 6,250) Balanced equities 1,25% (min. EUR 6,250) Growth 1,50% (min. EUR 7,500) Equities 1,50% (min. EUR 7,500) The fee is calculated based on the volume at the end of each quarter and is charged quarterly. ABN AMRO assesses no additional charges, so you pay no transaction costs, custody fee or dividend or redemption costs. 40% of the all-in fee is subject to VAT; 60% is VAT-exempt. This cost structure is applicable to portfolios from EUR 500,000. your benefits convenience At ABN AMRO, Portfolio Management takes the responsibility for your assets out of your hands. We naturally have regular contact with you to discuss the progress and performance of your investments. In addition, you receive a written report each quarter on your portfolio performance and composition. professional The portfolio managers of ABN AMRO rank among the best in their field. Drawing on their up-to-date knowledge and expertise, they deliver an excellent service based on a systematic and structured approach.

5 risks The Classic Mandate invests mainly in individual equities and bonds, but also allows you to benefit from extra market opportunities via investment funds, liquidities and structured products. Participants in the Classic Mandate run the risks normally associated with a broadly diversified investment portfolio compiled according to the vision of ABN AMRO. Equities typically involve exposure to a price risk. Bonds are subject to a debtor risk as well as an interest rate risk. Both these factors affect the price of bonds. Investment funds run the same risk as the individual securities included in the fund. Certain funds involve an alternative risk: guaranteed funds carry a smaller risk, while funds that invest in derivatives or credits entail an increased risk. As regards liquidities, fund participants run a debtor risk associated with the bank where the cash is deposited, while structured products involve a debtor risk on the issuing institution as well as the risk arising from the specific structure and movement of the underlying values. The value of your investment may fluctuate. Past performance is no guarantee of future results. discretionary portfolio management The Classic Mandate is one of the Discretionary Portfolio Management services offered by ABN AMRO. Other options you can choose from are: the Multi Manager Mandate, with investments in the best-positioned investment funds of leading fund houses, giving you direct access to the expertise of external portfolio managers; the Dynamic Asset Allocation Mandate, allowing you to optimally benefit from the market vision of ABN AMRO via flexible and dynamic diversification across the various asset classes; the Sustainable Investment Mandate, which invests in companies that adhere to strict environmental, social and corporate governance criteria; the Customised Mandate, offering customised solutions for your specific investment interested? Would you like to know more about the Dynamic Asset Allocation Mandate or any of ABN AMRO s other Discretionary Portfolio Management services? Your private banker would be happy to inform you further. You can also visit our internet site: privatebanking.

6 General Disclaimer The information provided in this document has been drafted by ABN AMRO Bank N.V. and is intended as general information and is not oriented to your personal situation. The information may therefore not expressly be regarded as a recommendation or as a proposal or offer to 1) buy or trade financial instruments and/or 2) procure investment services nor as investment advice. Decisions made on the basis of the information in this document are your own responsibility and at your own risk. The information on and conditions applicable to ABN AMRO-offered financial instruments and ABN AMRO investment services can be found in the ABN AMRO Investment Services Condition (Voorwaarden Effectendienstverlening ABN AMRO) and the Information Sheet Investment Services ABN AMRO (Informatieblad Effectendienstverlening), which are available on Although ABN AMRO attempts to provide accurate, complete and up-to-date information, which has been obtained from sources that are considered reliable, ABN AMRO makes no representations or warranties, express or implied, as to whether the information provided is accurate, complete or up-to-date. ABN AMRO assumes no liability for printing and typographical errors. The information included in this document may be amended without prior notice. ABN AMRO is not obliged to update or amend the information included herein. Neither ABN AMRO nor any of its agents or subcontractors shall be liable for any damages (including lost profits) arising in any way from the information provided in this document or for the use thereof. ABN AMRO, or the relevant owner, retains all rights (including copyright, trademarks, patents and any other intellectual property right) in relation to all the information provided in this document (including all texts, graphic material and logos). The information in this document may not be copied or in published, distributed or reproduced in any form without the prior written consent of ABN AMRO or the appropriate consent of the owner. The information in this document may be printed for your personal use. US Securities Law Disclaimer ABN AMRO Bank N.V. ( ABN AMRO ) is not a registered broker-dealer under the U.S. Securities Exchange Act of 1934, as amended (the 1934 Act ) and under applicable state laws in the United States. In addition, ABN AMRO is not a registered investment adviser under the U.S. Investment Advisers Act of 1940, as amended (the Advisers Act and together with the 1934 Act, the Acts ), and under applicable state laws in the United States. Accordingly, absent specific exemption under the Acts, any brokerage and investment advisory services provided by ABN AMRO, including (without limitation) the products and services described herein are not intended for U.S. persons. Neither this document, nor any copy thereof may be sent to or taken into the United States or distributed in the United States or to a US person. Without limiting the generality of the foregoing, the offering, sale and/or distribution of the products or services described herein is not intended in any jurisdiction to any person to whom it is unlawful to make such an offer, sale and/or distribution. Persons into whose possession this document or any copy thereof may come, must inform themselves about, and observe, any legal restrictions on the distribution of this document and the offering, sale and/or distribution of the products and services described herein. ABN AMRO can not be held responsible for any damages or losses that occur from transactions and/or services in defiance with the restrictions aforementioned. ABN AMRO is registered in the Trade Register of the Amsterdam Chamber of Commerce, no , with VAT identification number: NL B01. May 2010