MAC Financial - SIPP Managed Accounts Brochure
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Transcript of MAC Financial - SIPP Managed Accounts Brochure
SIPP Managed Accounts
The MAC Financial SIPP Managed Accounts
The MAC Financial SIPP Managed Accounts (MA) are an
offshore discretionary investment management service
designed to deliver:
The MAs are the default investment choice within the
MAC Financial SIPP. Please also see our separate “SIPP
Guide” for product details.
Seeking Absolute Returns
Above all the Managed Accounts seek to achieve
absolute returns and the management of absolute
portfolio risk. Relative performance comparisons are of
little importance to us and, indeed we believe, often leads
to irrational decision making.
If we or our investment management partners do not
believe an investment can achieve a respectable return
over a one year time horizon, we simply will not
recommend it.
Broad Asset Class Diversification
The Managed Accounts invest in a broad range of asset
classes, introducing a large number of independent
sources of return and risk.
Portfolio theory and statistical analysis demonstrate that
this approach can deliver performance with significantly
reduced volatility, when compared to a traditional
balanced investment approach.
Dynamically Managed
The Managed Accounts uses a highly flexible approach
to asset allocation, designed to exploit macro trends by
significantly tilting the exposure of a portfolio to each
asset class, region, sector or theme throughout the
investment cycle to maximise potential returns and
protect from market volatility.
Discretionary Service
The Managed Accounts are a full discretionary portfolio
management service, operated by our investment
management partner, Capital International Limited.
The Managed Accounts are available as three distinct
strategies, to meet your specific needs.
Target
Returns
Balanced MA
Growth MA
Volatility
Ranges
Cautious MA
8% 10% 13%
6-10% 8-12% 10-14%
Introduction
Exceptional Performance
Highly Personalised Service
Absolute Returns
Strict Risk Controls
Discretionary Management Costs
The total annual management charge is 1.60% per
annum. There are no set-up charges or initial fees;
however, an early redemption charge may be applicable
(up to a maximum of 3.5% of the total contribution)
depending on the length of time the account has been
held and the total contributions and withdrawals from it.
- Page 2 -
Understanding Financial Markets
Investment management is perhaps the most
misunderstood and at times mis-represented of all the
financial services.
So let‟s be clear from the outset, investment is all about
managing risk and the most common mistake that an
investor makes when choosing an investment or strategy
is to focus solely on returns.
Fear & Greed
Financial markets are driven primarily by emotions that
oscillate between fear and greed as opportunity is met by
uncertainty.
An investor that cannot look objectively at a portfolio and
make difficult and timely decisions based purely on
reasoned analysis and not emotion, is liable to get
sucked in at the top and thrown out at the bottom. That is
the nature of markets.
Objective Perspective
The power of emotions to influence investment decisions
should not be underestimated and the closer you are to a
portfolio, the greater the emotional influence. That is why
so few people are successful managing their own
portfolios.
Even highly experienced professionals can come unstuck
if decisions are not made within the supporting
framework of a rigorous investment process.
Full details of the Managed Accounts investment process
are available on request.
Risk/Return Balance
The short term unpredictability of markets is inescapable
and successful investment managers must work with,
and not second guess, that volatility to maximise returns.
Every investment can be described in terms of its
expected opportunity and its potential risk. That risk/
return balance is changing continuously and the
investment manager must objectively evaluate when the
risk is worth taking and when it is not.
Exploiting Volatility
In practical terms, consider what happens to this risk/
return balance when the value of an investment falls. All
other things being equal, the expected opportunity
increases, while the potential risk falls. The reverse is
also true and as markets rise, opportunities reduce and
risks increase.
This is clearly a simplification; however, it is easy to see
how this approach actually draws the manager in toward
the lows and encourages him out nearer the highs.
Continual Reassessment
In reality, of course, „all other things‟ are not always
equal and the investment manager must constantly
qualify and justify his or her assumptions to remain
objective.
Investment Objectives
- Page 3 -
Selecting An Investment Strategy
Finding the right investment strategy is not an easy task.
There are many considerations including financial
planning, tax efficiency and suitability that must be
assessed simultaneously.
Define Your Objectives
The first step in identifying an appropriate strategy is to
define your own objectives. What is the purpose of the
portfolio; what do you want it to achieve; how much risk
are you prepared to accept; and are there any specific
requirements?
Your MAC Financial Adviser is best placed to help you
understand and formalise your investment objectives and
you should aim to review these at least once every year.
Performance Objective
The principal objective of most investors is to achieve an
absolute return on their capital. However, all investments
involve risk. Even cash is at risk from inflation and
exchange rate fluctuations.
Indeed, it is impossible to assess the value of a return
without knowing its associated risk. The Managed
Accounts ultimate aim is to achieve a high absolute
return for as little risk as possible - that is how Capital
International assess their performance.
Starting from this perspective, it is clearly absurd to make
investment decisions based on a relative assessment of
market indices or benchmarks.
Only two factors are important -
What is the expected return and for what risk?
By careful selection Capital International Limited can
actively review these objectives.
Investment Horizon
The investment horizon sets the perspective within which
investment decisions are made and is important because
market risk is largely a function of timescale.
Equities, for example, when considered over short time
periods can be extremely volatile. However, if the same
market is viewed over 5, 10 or even 20 years, the picture
is very different – short term volatility becomes almost
irrelevant. The Managed Account strategies reflect three
different investment horizons.
Cautious has a 1-2 year investment horizon, focusing on
reliable asset classes and accepting lower returns, as a
result.
Balanced has a 1 to 3 year investment horizon, allowing
greater freedom to achieve higher returns.
Growth has a 1 to 5 year investment horizon, enabling
the strategy to accept greater short term risk to enhance
returns.
The investment horizon does not reflect the Managed
Accounts suggested investment term. Like most
investment strategies, the Managed Accounts should be
considered over a minimum five year initial investment
period.
- Page 4 -
Investment Objective
The Managed Accounts investment objective is to
achieve absolute returns within defined risk parameters
and investment horizons.
Investment Approach
In pursuit of absolute returns the Managed Accounts
invest in a broad range of asset classes designed to
maximise its ability to deliver returns, whilst minimising
the associated risk.
Managed Accounts strategies are constructed around a
managed portfolio of collective investment vehicles,
delivering a unique combination of diversification,
flexibility and efficiency.
Each Managed Account strategy delivers a highly
diversified investment exposure and is designed as a
complete investment solution and core strategy.
Currency Options
Managed Account strategies are available in Sterling.
Minimum Investment
The Managed Accounts offer investors their own
bespoke portfolio and is available for portfolios with a
minimum initial size of £75,000. In addition, subsequent
lump-sum top-ups can be made with a minimum of
£5,000, along with regular minimum monthly
contributions of no less than £500.
Cleared funds must be in your portfolio and available to invest prior to the 25th of each month, known as the „cut-off date‟.
Strategy Switching
Investors may elect to switch between the Managed
Account strategies at any time without penalty on the
proviso that the instruction to switch is received
before the 25th of the month in which the strategy is
to be switched.
SIPP Balanced Managed Account
The Balanced Managed Account portfolio is our flagship
strategy. It is designed to deliver the optimal balance
between return and risk, offering:
10% Target Annual Return
8-12% Volatility Target
Fixed Interest
28%
Alternative Strategies
25%
Equity 45%
Cash 2%
The Balanced Managed Account portfolio is designed for
investors who are prepared to accept a moderate level of
risk to achieve higher potential returns. The strategy
balances a strategic exposure to equities and other
higher risk investments, with a spread of lower risk
investment asset classes.
Balanced targets a strategic currency exposure of 80% in
the portfolio base currency, to minimise foreign exchange
volatility.
Balanced is actively managed and employs a 30% swing
factor around its strategic exposure targets.
Investment Strategies
- Page 5 -
SIPP Cautious Managed Account
The Cautious Managed Account portfolio is a lower risk
strategy designed specifically for clients who require
lower volatility, offering:
SIPP Growth Managed Account
The Growth Managed Account portfolio is a more
aggressive strategy, targeting higher returns, but with a
higher level of risk. The strategy offers:
8% Target Annual Return
6-10% Volatility Target
13% Target Annual Return
10-14% Volatility Target
Fixed Interest
40%
Alternative Strategies
33%
Equity 25%
Cash 2%
Fixed Interest
10%
Alternative Strategies
23%
Equity 65%
Cash 2%
The Cautious Managed Account portfolio focuses on
more reliable asset classes in order to achieve its risk/
return targets.
Investment exposure is dominated by lower risk asset
classes such as fixed interest, arbitrage strategies and
commercial property, although the strategy includes
some exposure to equities and other higher risk
investments.
Cautious targets a strategic currency exposure of 89% in
the base currency, and employs a 30% swing factor to
maximise returns.
The Growth Managed Account portfolio is for investors
who are prepared to accept a higher level of risk in
pursuit of higher returns. The strategy has significant
exposure to equities and other higher risk investments,
but retains some exposure to lower risk assets to improve
diversification and control volatility.
Growth targets a strategic currency exposure of 71% in
the base currency, and utilises a wider swing factor of
50%, giving greater flexibility to deliver returns.
- Page 6 -
Diversification
Spreading risk by simply „not putting all your eggs in one basket‟ is clearly wise; however, effective diversification is much
more powerful than that.
Analysing how individual investments interact to form a portfolio yields some astounding revelations. Remarkably by
mixing independent, or „non-correlated‟ assets, it is possible to actually eliminate certain risks without compromising
returns.
Broad Asset Class Diversification
The power of diversification is really only limited by the
diversity of assets that are available for investment.
Investors are fortunate today to have a wide range of
alternative asset classes that are now economic and
practical to invest in, to complement the more traditional
asset classes.
The result is to shift the efficient frontier further out and
improve the risk-return trade-off that is achievable. The
MAC Financial SIPP Managed Accounts embrace this
added diversity, harnessing its power to enhance
performance.
Efficient Portfolio Optimisation
Once you have identified an appropriate risk/return
objective, it is then possible to statistically calculate the
optimal investment allocations that should achieve those
objectives over the long term. We term this process
efficient portfolio optimisation.
Diversification
Market Hedge
The Efficient Frontier
Average Volatility
Average Return
9.5%
7.5%
7% 12%
Bonds
Inflation Linked
Cash
Property High Yield
Equity
Arbitrage Hedge
Leveraged Hedge
Private Equity
The Efficient Frontier
You can, of course, mix assets to create a near infinite
number of portfolio combinations and each will have a
unique risk/return balance. However, the range of
possible portfolios is defined by the Efficient Frontier.
Everything below the frontier represents a possible
portfolio combination, while the area above it is
impossible to achieve.
What does this mean in practice? Well, why invest solely
in equities when portfolio A can achieve the same return
for less risk, and/or portfolio B can achieve a higher
return for the same risk?
- Page 7 -
Property
Commodity/Specialist
Arbitrage Hedge
Market Hedge
Pacific Basin
Emerging Markets
Continental Europe
Japan
North America
United Kingdom
High Yield
Investment Grade
Efficient Strategic Allocations
The Managed Account strategies have been engineered
by our investment management partner, Capital
International, through the process of efficient portfolio
optimisation to achieve their respective target returns, for
the lowest possible risk. The efficient strategic allocations
are detail below:
Tactical Allocations
The Managed Accounts are a „dynamic strategy‟ and
while the allocations detailed above highlight the long-
term strategic targets, day-to-day tactical allocations may
vary significantly from these levels in accordance with the
Swing Factor employed.
Cautious and Balanced utilise a swing factor of 30%
either side of the strategic allocations, while Growth has
a higher swing factor of 50%.
* The equity regional breakdown is illustrated for sterling
based portfolios reflecting a bias toward UK equities.
Balanced MA
Cautious MA
5.0%
Growth MA
Fixed Interest 10.0% 28.0% 40.0%
Equity * 25% 45%
35.0% 23.0% 5.0%
5.0% 5.0%
5.0% 9.0% 13.0%
2.5% 4.5% 6.5%
1.5% 3.0% 4.25%
1.25% 2.25% 3.25%
0.75% 1.25% 2.0%
100% 100%
10.0% 15.0% 5.0%
8.0% 5.0%
5.0% 5.0%
5.0%
8.0%
5.0% 5.0% 5.0%
100%
Alternative Strategies 33.0% 23.0% 25.0%
Cash 2% 2% 2%
14.0% 25.0% 36.0%
65%
Asset Allocation
- Page 8 -
Investment Opportunities
There are many asset classes that are available for investment and each offers a different risk/return characteristic. The
balance is continuously changing; however, typical return probabilities are illustrated below.
The confidence bands illustrate the probability of a 12 month return falling within the extremities of each band. The
expected average return is the centre point highlighted in dark blue & plotted in ascending order.
Volatility Of Returns Note the spread of possible returns for each asset class
either side of the average. Equities, for example, have
the potential to achieve over 35% in a year, but there is a
equal chance that equities may lose up to 17%. On
average, we expect equities to achieve a healthy 9%;
however, such a high level of volatility is unpalatable for
many investors.
Perhaps more surprisingly, when we look at fixed
interest, which is generally regarded as low risk, the
statistics suggest returns are likely to be between 17%
and minus 6% in any one year. With an average
expected return of just 5.5%, this asset class seems
equally unattractive when viewed in isolation.
Managed Account Target Return Profile The target return profiles for the three Managed Account
strategies are also illustrated above. Through effective
asset class diversification the MAC Financial SIPP
Managed Account strategies are able to target excellent
average returns, with substantially reduced risk. This is
illustrated by the tightening of the confidence bands for
each Managed Account strategy.
Investment Opportunities
90% 70% 50% 30%
Confidence Levels
0%
10%
20%
30%
40%
Fixed Interest
Arbitrage Hedge
High Yield
Commercial Property
Commodity Global Equity
Market Hedge
SIPP
Balanced SIPP
Growth SIPP
Cautious
-10%
-20%
Cash
Retu
rn
- Page 9 -
Client Service
Your MAC Financial Adviser should be your principal
point of contact should you wish to discuss the generic
nature of your Managed Account portfolio. We work
closely with our investment management partner, Capital
International Limited, to ensure we are kept fully informed
of strategy, performance and portfolios.
Portfolio Manager
Every Capital International Managed Account portfolio
has a dedicated portfolio manager, and clients may
contact their portfolio manager at any time, either by
telephone or in person, during normal working hours.
For more information on this service please contact your
MAC Financial Adviser.
Reporting
MAC Financial SIPP Managed Account clients receive
contract notes on all transactions and the following
quarterly reporting:
Managed Account Charges
The MAC Financial SIPP uses a transparent charging
structure designed to minimise costs, but without
compromising quality or service. Internal dealing fees are
charged at a nominal rate to ensure performance is not
degraded. The total annual charge is 1.6% of the portfolio
value, deducted quarterly in arrears. There are no setup
charges or initial fees.
Redemption Structure
The Managed Accounts recommended initial investment
term is a minimum of five years. An early redemption
charge may be applicable on redemptions independent
on the length of time the portfolio has been held and the
total contributions and withdrawals from it.
An instruction to partially or fully redeem must be
received to the 25th of each month, known as the „cut-off
date‟.
The maximum redemption charge is 3.5% of the total
contributions, which diminishes quarterly, at a rate of
0.6% of the quarterly portfolio value per annum.
We reserve the right to vary the term over which the
redemption charge is taken if benefits are withdrawn.
( e.g. tax free lump sum )
Further information
Further information regarding the MAC Financial SIPP
Managed Accounts can be found within our Terms of
Business, including the option to hold other funds.
If you wish to discuss any aspect of the Managed
Accounts please do not hesitate to contact us:
Telephone: +44 (0) 1624 639450
Facsimile: +44 (0) 1624 639459
E-mail: [email protected]
Account Opening
To open an account please complete the SIPP account
opening form and send it, together with the appropriate
‘Know-Your-Customer‟ information to:
SIPP Managed Accounts
MAC Financial Limited
MAC House
64a / 65 Hope Street
Douglas
Isle of Man
IM1 1JE
Valuation & Statements
Performance Report
Detailed Portfolio Review
Market Review & Outlook
Client Services
- Page 10 -
About MAC Financial Limited
MAC Financial, through various acquisitions, has over
twenty-five years experience in the Isle of Man, providing
Employee Benefits advice to large multi-national and
small corporate clients. As a Corporate IFA (Independent
Financial Adviser) for investment business, licensed by
the Isle of Man Financial Supervision Commission to
carry on Investment Business, we can access and advise
on a full range of financial planning services.
MAC Financial Limited acquired Aon Financial Services
in January 2004. MAC Financial also acquired Marsh‟s
Financial Services book of business in the Isle of Man in
October 2005. Then in September 2006 MAC Financial
acquired the investment division of Anglo Irish Bank.
While the generic advice in this brochure is approved by
MAC Financial Limited, no specific fund
recommendations are made. The overall SIPP is
administered by MAC Financial Pension Trustees which
is registered with the Insurance & Pensions Authority as
a professional retirement benefits scheme administrator.
MAC Financial design, advise and implement Employee
Benefits Programmes for employers on the Isle of Man.
Our core expertise includes:
Group Pension (Occupational & Personal Pension)
Group Death in Service
Group Long Term Disability (Income Protection)
Group Additional Voluntary Contributions (AVC)
Group Private Medical Insurance
Small Self Administered Pensions to directors
Self Invested Personal Pensions to Professionals and
Senior Employees
Shareholder Protection
Partnership Protection
In addition we also offer independent financial advice to
the employees and pensioners of our corporate clients.
MAC Financial also works closely with accountants and
solicitors to provide a complementary service to their
clients.
Our main areas of activity for Private Clients are:
Personal Pension advice
Pre-retirement and redundancy planning
Investment planning
Life Assurance (including sickness and healthcare)
Advice to accountants, solicitors and their clients.
Investment Management Partner
We have chosen Capital
International Limited to
deliver a fully discretionary
portfolio service. They are a broad scope investment
business based offshore in the Isle of Man. Established in
1996 on the foundations of integrity, innovation and
excellence, they provide services to a wide range of
institutions and private individuals worldwide, including the
Isle of Man Government.
Capital International exists to create long-term and valued
relationships with clients and business partners built on
trust and the delivery of effective and innovative
investment solutions that meet their needs. They are
proud to count amongst their clients many internationally
respected financial institutions.
Capital International is licensed by the Isle of Man
Financial Supervision Commission and a Member of The
London Stock Exchange and an Isle of Man Champion.
Background
- Page 11 -
What are the SIPP Managed Accounts?
The SIPP Managed Accounts are a portfolio of collective investments, managed on your behalf by our investment management partner, Capital International Limited, and their discretionary management team. The SIPP Managed Accounts provide you with a range of investment objectives.
How do the Managed Accounts work?
Once you have selected your choice of Managed Account strategies, Capital International Limited will manage the portfolio on your behalf in accordance with the stated investment objectives.
What are Collective Investments?
Collective or „Pooled‟ Investments include unit trusts, open ended investment companies, investment trusts, exchange traded funds and mutual/offshore funds.
How do collective investments work?
When you buy into a collective investment you are effectively pooling your money with other investors, in exchange for units/shares in the fund. Your money is passed over to a professional fund manager, who invests your money in accordance with the fund‟s investment objectives.
What are the benefits of investing in collective investments
as opposed to buying shares in single companies?
Collectives provide a very efficient means of accessing a wider range of investments. For example, most equity funds hold between 30 and 100 individual shares. The cost of building and maintaining such a portfolio yourself can be very expensive. Risk is spread across a wide range of holdings and each fund is professionally managed. Collectives also provide access to world markets which can be difficult to access and monitor directly.
Why choose MAC Financial Limited?
MAC Financial has over twenty-five years experience in the Isle of Man, providing Employee Benefits advice to large multi-national and small corporate clients. As a Corporate IFA (Independent Financial Adviser) for investment business, regulated by the Financial Supervision Commission, we can access and advise on a full range of financial planning services.
Who regulates MAC Financial Limited?
We are licensed to conduct investment business by the Isle of Man Government Financial Supervision Commission. The provider of the SIPP itself is MAC Financial Pension Trustees Limited which is registered with the Insurance & Pension Authority as a Professional Retirement Benefits Scheme Administrator.
Do the Managed Accounts carry risks?
All investments carry an element of risk. The level of risk is determined by your choice of SIPP strategy and it is important that you seek appropriate advice from your investment adviser before selecting a strategy.
How much will the Managed Accounts cost?
The annual charge for SIPP Managed Accounts is 1.60%, based on the value of the portfolio at each valuation date. There are no setup or initial charges.
Value Added Tax (VAT)
VAT is currently applicable on a quarter of the total annual charge. VAT will be charged at prevailing rate if applicable.
Are there any transaction or bank charges?
A transaction/commission fee of 0.25% will be applied to each transaction; however, all discounts negotiated with the fund managers are credited to the portfolio in full. Normal bank charges will apply where appropriate.
Are there any redemption charges?
The amount of the redemption charge (if any) is dependent upon the length of time the portfolio is held. The maximum charge is 3.5% of the total contributions made, but this percentage reduces quarterly, at a rate of up to 0.6% of the quarterly portfolio value per annum.
What is the settlement period for redemptions?
An instruction to partially or fully redeem must be received prior to the 25th of each month (the „cut-off date‟).
What is the minimum/maximum investment?
The minimum investment into the MAC Financial SIPP Managed Accounts is £75,000.
There is no maximum investment.
Is it possible to make subsequent contributions into my
MAC Financial SIPP Managed Account portfolio?
Yes. The minimum subsequent lump-sum investment is £5,000 with regular monthly contributions being no less than £500.
When will my contributions be invested?
Cleared funds must be in your account and available to invest prior to the 25th day of each month being the „cut-off date‟.
Will I have access to my investment manager?
Yes, you can access your investment manager at any time, to discuss any aspects of your MAC Financial SIPP Managed Account portfolio.
Can I make a withdrawal or capital repayment?
Yes, you may withdraw funds from your portfolio at any time, subject giving notice prior to the 25th „cut-off date‟ and the rules governing your pension either on a one-off or on a regular basis, by simply sending appropriate instructions to us in writing. A redemption charge may apply.
How do I monitor performance?
Every three months we will send you a portfolio valuation and investment report, along with details of any changes that took place during the review period. Your manager will be available to discuss any performance issues.
Frequently Asked Questions
- Page 12 -
Can I switch between the Managed Account Strategies?
Yes, provided you instruct us in writing we will arrange a switch for you. We do not recommend frequent switching between the MAC Financial SIPP Managed Account strategies.
How do I invest in the MAC Financial SIPP Managed
Accounts?
Investing in the MAC Financial SIPP Managed Accounts is easy. The Managed Accounts are available via the SIPP product. Simply complete the SIPP application form and return it to us. If you require further information, please contact us on +44 (0) 1624 639450. Once your account is opened we will arrange with you the transfer of the necessary funds in order to activate your SIPP.
How do I redeem my SIPP Managed Account Portfolio?
If you decide to encash your SIPP Managed Account portfolio, simply instruct us in writing prior to the 25th of each month. We will liquidate your holdings and forward the proceeds to a suitable alternative and permitted pension arrangement.
What is a Discretionary Managed Portfolio?
An investment portfolio where the investment manager has discretion or sole responsibility to make investment decisions on your behalf, in accordance with the stated investment strategy as agreed with you in writing.
What is an Investment Manager?
The qualified person responsible for managing your investment portfolio.
What are Unit Trusts?
A trust formed to manage securities on behalf of a large number of investors. Unit Trusts are governed by Trust Law: the trust deed sets out the investment objectives of the trust and the Trustees are responsible for ensuring the fund is managed in accordance with the stated objectives.
What are Equities?
Equities represent proportionate ownership of a company. Individual equities can be risky, but collectively they have proved to be one of the best performing asset classes over the long-term and an excellent hedge against inflation.
What are Investment Grade Bonds?
Investment grade bonds or fixed interest securities are high quality debt instruments providing a fixed return to a known maturity date. Bonds offer lower risk returns and tend to move in an opposite direction to equities, making them an excellent diversifier within a portfolio.
What are High Yield Bonds?
High yield bonds are debt instruments issued by entities with a credit rating below investment grade. They offer higher returns but involve greater risk. High yield bonds display some characteristics of both equities and bonds. This makes them particularly useful at certain stages of the economic cycle.
What about Property?
Residential property can be volatile, reacting sharply to changes in growth, inflation and interest rates. By contrast commercial property offers stable long-term yields, while capital values have tended to keep pace with inflation.
What is Arbitrage Hedge?
Arbitrage strategies seek to exploit mis-pricing and market inefficiencies to deliver a low risk investment return, with little or no correlation to financial markets making arbitrage strategies an excellent portfolio diversifier.
What is Market Hedge?
We define market hedge funds to include long-short equity strategies, FX and global macro strategies. Market strategies tend to target aggressive returns and accept relatively high levels of risk. Returns tend to be un-correlated with traditional assets, making hedge strategies an excellent diversifier.
What are Commodities?
Commodities are real assets including energy, precious metals and natural resources. Commodity values are determined principally by supply and demand and can prove a safe haven during difficult times.
What are OEICs?
Open Ended Investment Companies (OEICs) are similar to unit trusts in so far as they are pooled investments. They differ in structural terms as they are companies and not trusts. The Authorised Corporate Director is responsible for ensuring the fund is managed in accordance with the stated objectives.
What are Investment Trusts?
Another type of collective investment but unlike unit trusts and OEICS, investment trusts are closed end quoted companies whose shares are listed on the stock exchange and trade in the same way as any other listed security.
What are ETFs?
Exchange Traded Funds (ETFs) are quoted shares which provide investors with access to a particular index (e.g. the FTSE 100) or sector.
What are Offshore Funds?
Are similar to unit trusts and OEICs but based or „domiciled‟ outside the United Kingdom to obtain a tax advantage. Some funds allow the manager greater investment flexibility.
What is Exchange Rate Risk?
The risk that the value of the investment may be reduced by movements in the exchange rate on a foreign currency. For example, a „Sterling’ investor investing in any fund denominated in a currency other than sterling would face exchange rate risk in addition to the investment risk.
Frequently Asked Questions
- Page 13 -
Contact Details
MAC Financial Pension Trustees Limited
MAC House
64a / 65 Athol Street
Douglas
Isle of Man
IM1 1JE
T: +44 (0) 1624 639450
F: +44 (0) 1624 639459
MAC Financial Limited is licensed by the Isle of Man.
MAC Financial Pension Trustees Limited is registered with the Insurance & Pension Authority.
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