The investment world in your own account

Transcription

1 Merrion Solutions is a division of Merrion Stockbrokers Limited. Merrion Stockbrokers Limited is regulated by the Central Bank of Ireland. Merrion Stockbrokers Limited is a member firm of the Irish Stock Exchange and the London Stock Exchange. The investment world in your own account

2 1 myfunds from Merrion CONTENTS Introduction 2 Do you know where your funds are? 3 How does myfunds work? 3 Part A: myfunds Model Portfolio 4 Part B: myfunds Personal Portfolio 6 What does myfunds offer you? 8 myfunds Summary 9

3 myfunds from Merrion 2 myfunds is a new investment service from Merrion. It combines Merrion s Asset Management and Stockbroking capabilities into one low cost, transparent and liquid service. Who is the new myfunds service account designed for? The short answer is everyone, but in particular, we would say that if you answer yes to one or more of the following questions, you should consider the new myfunds account from Merrion. Have you suffered capital losses or do you have realisable losses? Are you confused about the level of choice in the investment market? Does having the choice to manage part of your funds personally and also, within the same service, having access to one of Ireland s leading asset managers appeal to you? Do you have one or more stockbroking accounts or have you an interest in share dealing? If so, do you have too much individual stock concentration in your stockbroking portfolio?

4 3 myfunds from Merrion Do you know where your funds are? People have lots of different assets which collectively make up their funds. Examples of such assets are your lump sum investments, pensions, cash, government and corporate bonds, post office savings etc. Deciding how and where to invest your funds is a complicated business and, today more than ever before, the almost unlimited choice of complex financial instruments being offered to investors by an equally unlimited list of financial institutions has left many confused. Too much choice has resulted in a disjointed outcome where investors and their advisors face difficulties in making investment decisions and ultimately in keeping track of where their various savings and investments are! myfunds is about keeping it simple. It's about offering you access to the entire investment universe but within your own account. It doesn't matter whether you're a cautious or aggressive investor, whether you want global diversity or just one asset, active management or passive index tracking, personal involvement and/or professional asset management, myfunds is about giving the control and ownership of your investment funds back to you. How does myfunds work? When we designed our new service we wanted to create something different to anything else available in the Irish market today. We listened to what our clients are saying and what we found was: That there will always be demand for our advisory stockbroking service where you have unlimited access to an experienced portfolio manager and get stock specific information and advice which you may or may not choose to act upon. That there is also considerable demand for a service that allows investors who know exactly what assets they wish to purchase, to execute those transactions without any personal advice. And that there are many clients who recognise the benefit of having some or all of their assets managed for them. We put considerable time and resources into designing a solution that caters to the needs of every investor.. The new myfunds service employs institutional techniques and processes for investors. It allows you to take control of your funds but also to employ the services of our professional asset managers if and when you wish. The myfunds investment service from Merrion has two distinctively different elements. 1. Firstly there is your Model Investment Portfolio in which your funds are managed for you within a range of both Specialist Actively Managed Portfolios and Risk Weighted Systematic Portfolios. 2. Also myfunds offers you the choice to manage part or all of your investment funds in your Personal Portfolio either on an Advisory or Execution Only basis. Actively Managed Advisory Systematic Portfolios Your Model Investment Portfolio Your Personal Investment Portfolio Execution Only Warning: The value of your investment may go down as well as up. You may get back less than you invest. Warning: If you invest in this product you may lose some or all of the money you invest.

5 myfunds from Merrion 4 Part A: Your Model Portfolio Many successful savers and investors buy in gloom and sell in boom. Unfortunately, for some retail investors, investing can be emotive and many investment decisions tend to be based on fear and greed. As can be seen from the graph below, some investors have a tendancy to buy when markets are peaking and sell when low. Excitement Optimism Thrill Euphoria Investors tend to BUY here... Anxiety Denial Fear Desperation Optimism Economic activity Time Panic...and SELL here! Relief Capitulation Hope Despondancy Depression myfunds Model Portfolios take the emotion out of investing How will your myfunds Model Portfolio be managed? The debate about whether active or passive asset management is the correct financial strategy will likely continue indefinitely. Our answer is to offer you both. The myfunds model investment portfolios offer you a choice of both Risk Weighted Systematic Portfolios and also Specialist Active Management with a selection of actively managed investment portfolios. Who manages the myfunds Model Portfolios? The model portfolios have been created and are managed by a closely-knit investment team made up of Merrion investment professionals, researchers and fund managers. Merrion is in a strong competitive position because we have both Stockbroking and Investment Management capabilities under one roof. Merrion s investment management business has circa 1bn of assets under management. We have over twenty five years experience in managing investment portfolios on behalf of pension schemes, corporate bodies, charities, religious orders, foundations and high net worth individuals.

6 5 myfunds from Merrion Your Model Investment Portfolio myfunds Actively Managed Your Model Investment Portfolio myfunds Systematic Portfolios myfunds Specialist Actively Managed Portfolios myfunds offers you a range of actively managed portfolios. These portfolios are concentrated but yet achieve a high degree of diversity through investing in between 20 and 30 assets. We seek to invest in areas of the market where we see the most attractive opportunities, as opposed to holding the stocks with the largest representation in the various indices. Successful investing is a function of effective decision-making so consequently, we operate a small closely-knit investment team where individuals enjoy a high level of autonomy, and a good track record in decision-making. Merrion Investment Managers has always focused on the markets rather than the consensus of the competition. This has helped us to capture the sectoral themes that drive investment returns and enabled us to perform consistently in changing environments. Full details of the various actively managed portfolios can be found at The Irish Opportunities Portfolio The Irish Opportunities Portfolio is an excellent vehicle to gain exposure to the recovery potential of the Irish economy. Valuation levels for Irish equities remain appealing. Indeed, Ireland has started to attract overseas investor interest. The Irish Opportunities Portfolio is different from most Irish Equity portfolios as it can invest in both companies domiciled in Ireland and International companies which have business interests in Ireland such as Google, Microsoft or Apple. As a result it gives an investor broader exposure to some of the key drivers of not only the Irish economy, but the global economy as well. The Global Opportunities Portfolio The investment objective of the portfolio is to secure long term capital growth by investing primarily in Equities but also Bonds, Alternative Assets and cash. The Investment committee has the flexibility to build up cash reserves to protect and hedge the portfolio. Although likely to be concentrated in the developed regions of the euro-zone, UK and the US, the portfolio may look to expand the regional exposure to include emerging markets.

7 myfunds from Merrion 6 myfunds Actively Managed Your Model Investment Portfolio myfunds Systematic Portfolios myfunds Risk Weighted Systematic Portfolios The Risk Weighted Systematic Portfolios The European Securities and Markets Authority (ESMA) has provided guidelines for the methodology that investment managers should use when calculating the synthetic risk levels of their investment strategies. ESMA has defined 7 volatility intervals which reflect the increasing level of risk borne by an investment strategy and therefore, its position on the ESMA risk scale. We have designed 7 different risk weighted systematic portfolios that are consistent with the volatility intervals defined by ESMA. These risk weighted systematic portfolios cater to the needs of all investors from the individual who is ultra conservative to the one who is seeking high levels of growth. Financial Brokers and investors can combine their understanding of the investor s attitude towards and capacity to bear investment risk with the ESMA volatility intervals in order to select the risk weighted systematic portfolio most suited to their needs. The emphasis within these 7 model portfolios is on keeping things simple. We don t offer dozens of fund managers or thousands of funds but rather we take a more passive and less expensive approach. A select number of Exchange Traded Funds (ETFs) are blended to give you complete diversity and we rebalance the mix of each portfolio monthly to ensure your model portfolio remains within the ESMA volatility intervals. Risk Weighted Systematic Portfolio ESMA Volatility Intervals Equal or above Less than 1 - Ultra Conservative 0% 0.5% 2 - Conservative 0.5% 2% 3 - Cautious 2% 5% 4 - Prudent 5% 10% 5 - Balanced 10% 15% 6 - Dynamic 15% 25% 7 - Aggressive 25% NA

8 7 myfunds from Merrion Part B: Your Personal Portfolio This element of your portfolio gives you complete freedom and allows you to invest in a wide range of assets as you wish. All listed securities including Stocks, Structured Investments, Fixed Income Securities, Exchange Traded Funds etc. are available for you to choose. STOCKS AND SHARES STRUCTURED INVESTMENTS BONDS - CORPORATE - GOVERNMENT Your Personal Investment Portfolio DEPOSIT EXCHANGE TRADED FUNDS (ETF s) REAL ESTATE INVESTMENT TRUSTS (REIT s) STOCKS AND SHARES The entire investment universe is open to you and you can access any listed security including domestic and international shares through your Personal Portfolio. It is also possible to invest in commodities and Exchange Traded Funds which are explained in more detail below. BONDS The Merrion bond desk is a highly respected trading and research business, specialising in Eurozone and other sovereign, corporate and financial credits. We deal with investors across Europe and North America, including domestic and international asset managers, hedge funds, private banks, family offices and other retail investors. Many investors like to hold bonds as part of their portfolio because they add diversity and also stability to the overall mix. Within your myfunds Personal Portfolio, the full range of both government and corporate bonds is available to you. STRUCTURED INVESTMENTS Merrion has combined the expertise of Duggan Asset Management and Merrion Stockbrokers to form one of Ireland s leading and most innovative specialist Structured and Alternative Investment providers. This expands Merrion s capacity and expertise in delivering fully and partially capital protected investments to our clients and to clients of Investment Advisors. DEPOSITS Within your myfunds Personal Portfolio you have a variety of deposit takers to choose from including Rabobank, Bank of Ireland and Ulster Bank. REAL ESTATE INVESTMENT TRUSTS REITs Investing in REITs is a liquid, dividend-paying means of participating in the real estate market. A REIT is a security that trades like a stock on the major exchanges and invests in real estate directly. Through your Personal Investment Portfolio you can invest in a variety of REITs by purchasing their shares directly. EXCHANGE TRADED FUNDS - ETFs An exchange-traded fund (ETF) is an investment fund traded on stock exchanges, much like shares. An ETF can hold assets such as stocks, commodities, or bonds but most ETFs track an index, such as a stock index or bond index. ETFs are attractive investments because of the diversity they offer and also their low inbuilt fees.

9 myfunds from Merrion 8 There are two separate services available to you as follows: myfunds Advisory Service Your Personal Portfolio myfunds Execution Only Service myfunds Advisory Service myfunds Execution Only Service Your dedicated Advisory Portfolio Manager will provide a complete relationship service including personalised advice on the selection of securities and other tradable instruments based on your particular investment objectives. We strongly believe in the value of personal contact and in building lasting client relationships. Our independence is part of what differenciates us from the competition and our advice is recognised as being objective, with a reputation for presenting the facts in a straightforward manner. If you do not require a dedicated advisory portfolio manager or any advice from Merrion in relation to your Personal Portfolio then this service is for you. Merrion s Execution Only service provides direct access to equity markets and the various asset classes listed on the next page. It differs from online trading in three main ways: 1. We employ a qualified Execution Only portfolio manager to execute your trade. The process is very efficient and usually your trade can be executed whilst you are on the phone. 2. We ensure you get the best price available on the market whenever you trade with Merrion. 3. You will benefit from having access to a highly skilled Research Department and, should you wish, receive regular research information.

10 9 myfunds from Merrion myfunds offers you the following Beneficial/Direct Ownership A key differentiating feature of the myfunds service is that, unlike traditional fund or pooled type investment vehicles, you retain the beneficial ownership of the assets within both your Model and Personal Portfolios. This provides you with full visibility of the underlying assets as well as potentially significant tax advantages. Your Model Portfolios Within the Model Portfolio element of your myfunds account our investment team makes decisions on your behalf and trades collectively for everyone. Once the trades are confirmed, each individual investor s account is updated simultaneously. Your Personal Portfolio Within your Personal Investment Portfolio you literally have the investment world at your disposal. You can choose between the Advisory Service and Execution Only Service depending on whether you want to manage your portfolio yourself or require the assistance of our experienced Portfolio Managers. Transparency You can view your holdings and transactions through the myfunds portal. This gives you complete transparency with regard to the underlying holdings. Our investment managers produce a monthly portfolio report for the Model Portfolios (available online) detailing performance over the month. This includes the current asset mix, any significant changes that were made during the month and the rationale behind those changes. Liquidity There is no lock-in period, no bid/offer spread, no early exit penalties and, within your Model Portfolios, we will concentrate on investing in liquid assets. Tax Efficiency Because you retain the beneficial ownership of the assets within your account, you also get all of the related taxation benefits. Under current legislation, capital gains on many of the holdings within your portfolio can be offset against existing realised losses. Warning: The information in this brochure should not be used in any actual transaction without the advice and guidance of your accountant or tax adviser who is familar with all the relevant facts and your personal financial circumstances. The information may not be applicable to you, or suitable for your individual specific circumstances or needs and may require consideration of other matters. Diversity - Spreading Your Risk myfunds Model Portfolios invest in a range of underlying securities. This means that the risk is spread across many assets rather than being concentrated in one or only a few. In particular, within the myfunds Risk Weighted Systematic Portfolios, we make extensive use of Exchange Traded Funds (ETF s) to gain access to certain markets and sectors e.g. we might purchase an ETF which tracks the performance of an emerging market rather than purchasing one stock within that region. This has the effect of minimising the stock specific risk within your overall portfolio. Warning: The value of your investment may go down as well as up. You may get back less than you invest.

11 myfunds from Merrion 10 Merrion s myfunds service in summary The financial world is becoming increasingly complex and fast moving. Many investors do not have the time, inclination or knowledge to develop an understanding of the complexity of markets and individual investments and, indeed, to maintain that knowledge into the future. myfunds is the ideal investment vehicle because it offers a solution for those who want to benefit from professional asset management whilst, at the same time (and in the same structure), retain the ability to trade personally. The Model Portfolio element of your myfunds service is managed by a highly qualified investment team whose full-time job is to make investment decisions. Within your Personal Portfolio you have the freedom to invest as you wish with the assistance of our advisors and support from the Merrion research team and Chief Economist. Beneficial ownership of your assets gives you total transparency and potentially significant tax advantages over traditional funds. Liquidity today is more important than ever and the myfunds service from Merrion has no in-built exit constraints. Through the fee structure, your interests are aligned with Merrion s. In your myfunds Active Model Portfolios we do not charge any ongoing trading commission, just a management fee to support the professional management, reporting and administration of your account. We are motivated by performance so our investment team will be rewarded when your portfolio grows in value.

12 Tel: Fax: info@merrion-capital.com