ROCK-SOLID WEALTH PROTECTION IN THE PALM OF YOUR HAND

Transcription

1 Alternative Wealth Solutions ROCK-SOLID WEALTH PROTECTION IN THE PALM OF YOUR HAND Diamond prices are certainly on a trajectory. Prices of half-carat diamonds have risen by 49 percent since One-carat diamonds have risen by 88.9 percent in the same period. Meanwhile, three-carat diamonds have gone up a staggering 238 percent over the same time frame. Financial Times, September 2012

2 Alternative Wealth Solutions HIGH-VALUE FINANCIAL SERVICES DFI is a financial services provider headquartered in Zurich, Switzerland, which specializes in the development of safe-haven investment alternatives founded on tangible high-value commodities. We do so by balancing cuttingedge innovation and acumen with the tradition, strength and regulatory environment of an established Swiss financial institution. The Diamond Shield suite is DFI s core investment offering and is centered on the inherent value contained in high-grade, natural diamonds. But unlike diamond investment programs that only allow you to buy a financial instrument referencing diamonds, Diamond Shield puts the actual asset in your hands. A DFI client does not buy into a fund, but obtains full ownership of physical diamonds. And the diamonds retain their status as a fully tradable asset, for our proprietary financial analysis and ability to access the loose diamond markets enables a client to monetize an investment at any given time. To enable our clients obtain optimal benefit from loose gemstone investments, DFI s front office offers the expertise of financial market managers, analysts and investment advisors, while the back office includes diamond specialists with direct access to the international loose gemstone markets. As part of our service package, DFI clients are afforded a range of exclusive facilities and benefits, including: personal and non-discretionary investment advisement, real time, online reporting to monitor asset performance, market research, analysis and forecasting, use of DFI s storage facilities in the Zurich and Geneva Free Zones, premium asset sourcing at competitive wholesale prices, expert verification of investment assets before completion of transactions, and a lean advisory fee structure and handling fees.

3 THE DIAMOND AS A PREFERRED INVESTMENT ALTERNATIVE EXCLUSIVE TO DFI The diamond is not only the most highly regarded of all precious gemstones, accounting for about half of sales in terms of value, but it also is a prestigious preserver of value. In a volatile financial market environment, the high-grade diamond is an effective agent for diversifying and protecting traditional investment portfolios. THE DIAMOND SHIELD INVESTMENT SUITE DIAMOND SHIELD AS A BANKABLE ASSET PROJECTED CAPITAL GROWTH LOW CORRELATIONS Developed and supplied exclusively by DFI, the Diamond Shield program involves a suite of investment portfolio types. Each is tradable, and is centered on physical highquality diamonds that are acquired specifically for the client, according to agreed-to individual portfolio requirements. In selecting the right portfolio type, the client is able to vary the size of the investment according to his or her own liquidity requirements. Only High-Quality Diamonds Qualify A limited range of diamonds qualifies for inclusion into the Diamond Shield program. All are round, brilliant shapes, fall within a narrow carat range, and carry uniformly high clarity, color and cut grades. Every diamond has been certified by the world s most recognized and respected gem grading laboratory, the Gemological Institute of America (GIA), before it is included in the client s portfolio. Transparent and Independent Trading Process For client investments of USD 1 million and more, DFI and its partners can provide access to a Diamond Shield portfolio through a securitized investment structure that is fully backed by the physical diamonds acquired. This allows the investment to become a bankable asset, thereby expanding the client s flexibility while he or she holds the investment. Financial Security Safeguarded during Acquisition Process All gems have to be GIA-certified and sealed before being delivered to a high-security facility located in either the Zurich or Geneva Free Zones. On request, the client s funds may be held in escrow, and the delivered diamonds will be examined by the exchange control agent to ensure that they fully comply with the agreed-to composition of the investment portfolio. Diamond prices are expected to climb steadily, as a result of a strong growth in demand in developing markets, coupled with lower growth in supply from rough diamond producers ANTI-INFLATIONARY HEDGE Diamonds are a safer bet than cash holdings. Studies show annual returns for white and colored diamonds of 6.4 percent and 2.9 percent above inflation from 1999 through LOWER VOLATILITY Between 2004 and 2011 annual price volatility of silver stood at 37 percent, platinum at 27 percent and gold at 19 percent. The average price volatility of polished diamonds was only 9 percent. OUTPERFORMING THE MARKETS High-grade natural diamonds have outperformed the leading stock market indices by an average of 14 percent per annum during the past 12 years. Diamonds exhibit low and stable correlations with the traditional financial market assets, and lower correlations with precious metals than the metals show with one another. TRANS-GENERATIONAL Throughout history, diamonds have been regarded as family heirlooms, informally passed down from generation to generation. TANGIBILITY AND AFFORDABILITY Like real estate, high-grade diamonds have a physical presence that will retain value over the long term. Unlike real estate diamonds can be acquired or disposed of in small units. PORTABILITY Small and compact, diamonds have served as a store of value during uncertain times. Easily transportable and tradable globally, they have been used as guardians of financial security. The most widely accepted industry price wholesale index is used to assess the value of the stones on the days of purchase and sale. The diamonds are acquired at wholesale prices by DFI strategic partners working in the major diamond trading centers.

4 PAST AND PROJECTED PERFORMANCE THAT CANNOT BE IGNORED Institutional investors, while familiar with other precious commodities, traditionally avoided diamonds. Because every individual stone is unique, many felt it is difficult to regard them as a standard commodity. But in recent years, the solid and often spectacular performance of gem-quality diamonds has been difficult to ignore. Future performance may be even stronger. Between 1999 and 2010, annualized real returns in U.S. dollar for white and colored diamonds stood at 6.4 percent and 2.9 percent respectively, and from 2003 equaled 10 percent and 5.5 percent. Both white and colored diamonds decisively outperformed stocks between 1999 and Renneboog and Spaenjers Finance Research Letters July 2012 High correlations among asset classes reduce diversification opportunities, and finding assets classes that are not correlated with the financial markets is a challenging task. The low, stable correlation between the financial markets and diamonds confirm that the diamond exhibits a tendency to move independently of both precious metals and the financial markets. Small, Smith & Small The Journal of Wealth Management Winter 2012 Demand for polished diamonds will expand by 6.6 percent in terms of value annually over the next decade, largely due to rising demand from newly affluent Chinese and Indian consumers and slower but steady growth in the U.S. market. At the same time, rough diamond production, which is required to sustain the demand for polished goods, will only grow at a compound annual rate of 2.8 percent globally. The almost inevitable result will be a steep increase in prices. Bain & Co. 2011/2012 CAGR year performance in % Until April 2013 DFI Switzerland % 350% 300% 250% 200% 150% 100% 50% 0% Gold 5-ct Diamond 3-ct Diamond 1-ct Diamond S&P 500 ETF US Treasury 7-10 y. (Total Return) estimated global rough diamond supply and demand Supply and demand of rough diamonds, millions of carats Bain & Company Higher Demand Supply Base Base Lower F 2014F 2016F 2018F 2020F 10.8% 6.4% 2.8% -0.5% DFI Diamond shield Average annual appreciation of diamond shield portfolio categories DFI $250K Portfolios (within a range of 16 Portfolios), based on the recorded performance of diamonds included in standard DFI portfolio categories of 3-year, 5-year and 10-year period.please note that past performance is not a guarantee of future performance. 25% 20% 15% 10% 5% 0 3 Year Performance 5 Year Performance 10 Year Performance 250k Conservative Portfolio 250k Moderated Portfolio 250k Growth Portfolio 1 250k Growth Portfolio 2 1,000 usd invested over 10 years DFI Switzerland ,000$ 4,500$ 4,000$ 3,500$ 3,000$ 2,500$ 2,000$ 1,500$ 1,000$ 500$ 0 Gold 5-ct Diamond 3-ct Diamond S&P 500 ETF US Treasury 7-10 y. (Total Return) 1-ct Diamond

5 STRATEGIC RELATIONSHIPS Gemological Institute of America GIA is considered the world s foremost gemological authority on diamonds, colored stones, and pearls, setting the standards for grading practices worldwide. Malca Amit With agents in 31 countries, Malca-Amit is the leading specialized provider of secure logistical solutions for the diamond and jewelry, precious metals sectors. Control & Compliance Framework BDO Switzerland BDO AG is one of Switzerland s leading providers of independent auditing, accounting and management consulting services, and acts as DFI s statutory auditor, conducting the financial audit. BDO will act as independent exchange control agent and monitor and report on the performance of DFI s internal control process as part of their annual audit, if specifically requested, they will also audit individual clients accounts. DISCLAIMER This brochure contains information about DFI and its services and is to be used for general information purposes only. DFI will not take any responsibility for information provided by third parties which is contained herein. The information contained herein shall not be regarded as providing investment, legal or tax advice. Direct investing in real diamonds is a complex process and should not be undertaken without obtaining detailed advice from appropriate experts prior to making any investment decisions. DFI is not offering for sale any financial security investment and is therefore not regulated by any financial securities regulator. Past performance is, as always, not a guarantee or promise of future performance. The value of any investment can and will fluctuate due to several factors; many of them will not be under the control or influence of DFI or the investor. Claridenstrasse 22, 8002 Zurich - Switzerland Phone +41 (44) , Fax +41 (44) info@dfi-switzerland.com, BR13ENG