Portfolio Management Services (PMS)

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1 Portfolio Management Services (PMS) "Investment is a Dynamic Process where the Key is not just Earn Return on Investments But Earn Superior Return from Opportunities that Meets your Aspiration" Kriti Capital & Investments Ltd. (Kriti Capital) assists Savers to be Smart Investors who opt for higher return on their investments. Investors should be able to maximize returns but minimize risks. Kriti Capital as a Portfolio Manager will work diligently with Individual Clients to provide active investments strategy that ensures that the interests of the Clients are met and return on investments optimized. The portfolio team at Kriti Capital will help you choose among three different unique services that are best suited to your needs and interests. Firstly we identify and analyze your needs, and then we define your objectives and set out a strategy. Through regular updates you can redefine your management objectives and/or amend your risk profile at any time. Through our dedicated investment platform and our open architecture philosophy, you can build your portfolio from a range of asset classes across all markets. These services vary depending on the degree of involvement you want to have in terms of managing your investments.

2 Discretionary Portfolio Management The Discretionary Portfolio Management platform allows you to delegate with total confidence of managing the portion of your investments to us. You define your investment objectives and entrust us with managing your assets according to the strategy selected. Working closely with you, we design your Investment Policy Statement (IPS) that fits your personal needs and objectives, and we ensure it is properly executed and monitored actively. Under this type of service, we have numerous designated as well as tailor-made portfolios to cater to both individual as well as institutional investors. For Individual Investors, we currently have four types of varying portfolios that is suitable for all kinds of clients: a) Kriti Equity Portfolio This product offers an aggressive portfolio with investment only in equities (large cap, mid cap and small cap) for greater return on investment. This portfolio will be diversified across different sectors and focus on greater capital appreciation. This product is suitable for investors who are willing to take higher amount of risks for higher expected returns. 90% - 100% in Equity b) Kriti Blend Portfolio This product offers a balanced portfolio that has a greater focus on increasing value for the client by providing superior risk-adjusted returns and capital appreciation by diversifying across various sectors. This type of portfolio is popular among investors who prefer a portfolio comprising of fixed income assets as well as equities of companies with strong core fundamentals. 60% in Equity 40% in Fixed Income Instruments

3 c) Kriti Sector Portfolio This product offers a portfolio that tracks a certain sector as per client s interest. The active management of the Portfolio Manager works diligently to outperform the benchmark index of the sector. Hence, the portfolio will be structured to provide superior returns over that of the benchmark. Structured as per client s sector preference d) Kriti Customized Portfolio This product offers a customized solution to investing which is designed to meet client s specific needs. This actively managed portfolio aims to maximize returns for clients as per their risk profiles and return expectations. Tailored to client s risk profile & return expectations We also understand that Institutional Investors may have unique requirements that vary with time. To cater to the needs of such investors, we offer a customized portfolio that is flexible and geared to generate optimum output ensuring safety of investments: a) Kriti Institutional Portfolio This product offers a customized solution for institutions which is designed to meet clients specific needs. This actively managed portfolio is diversified to make sure clients receive the best value for their investments. Tailored to client s risk profile & return expectations Minimum Investment Amount: NPR 500,000/- 18 Months Salient Features Actively managed portfolio Aims to maximize returns as per client risk profile Diversified multi-asset portfolio Regular portfolio reviews and adjustments to meet client s needs Personalized online access to browse one's portfolio

4 Non-Discretionary Portfolio Management The Non-Discretionary platform is a unique method of investing where clients have full discretion to instruct investment transactions and tailor their portfolio based on advisory and research services provided by us. We help the clients define long-term investment strategies based on the general investment analysis of the market, conditions and outlook. We also provide information on the market and securities to facilitate investment decisions. The client executes the orders and monitors his/her transactions. We provide our insights, offer bespoke solutions as well as relieve clients of clerical hassles. a) Kriti Non-Discretionary Portfolio Individual Investors This is a product for individual investors where we professionally manage your funds but you have the final say when making any investment decisions. We offer expert researchbased advice and also take away any clerical hassles to make investment management smooth and easy for our clients. Tailored to client s risk profile & return expectations b) Kriti Non-Discretionary Portfolio Institutional Investors This is a product tailored towards business firms and corporations who want certain amount of funds to be managed by professionals, however want to make the final decision regarding investment choices. This platform allows businesses to receive expert advice and research at no extra charge which would help them make sound decisions. Tailored to client s risk profile & return expectations Minimum Investment Amount: NPR 500,000/- 18 Months Salient Features Clients make their own informed decisions on investments Expert opinion and research based advice at no extra charge Transactions to be managed by us Custodial and clerical functions to be handled by us Personalized online access to browse one's portfolio

5 Portfolio Advisory Service Portfolio Advisory Service provides clients who wish to manage their own portfolios but want access to expert advices, research and market information which can help them make wellinformed decisions regarding their investments. The Portfolio Advisory Service allows you to have a direct relationship with a dedicated expert who is available to help you with your investment decisions. Continuous evaluation of market conditions requires time and effort. As part of the advisory service, our experts will dedicate their time to monitor the markets on your behalf and provide you research reports. Charges Charges for providing services shall be as per the fees structure attached.

6 Investment Selection Techniques Fundamental Analysis Fundamental Analysis involves a thorough analysis of a company s historic and present data to decipher trends that help in forecasting future company performance. Fundamental Analysis is more suited to long-term investing because the market value of an asset might be distorted. Technical Analysis Technical Analysis incorporates information, such as past prices and volume, generated from market activity to predict short-term movements in the market. Market Information Although Fundamental and Technical Analysis will provide most of the information required, certain situations might arise wherein reality diverts from theoretical expectations. In such instances, incorporating information and sentiments from the market will provide us with much needed guidance to model such market. Transaction Management Efficiency Every transaction must be weighted for its costs and benefits; not only for that transaction but with respect to the entire portfolio. Existing cost and tax structures and proposed changes (if any) are taken into consideration before making any decision regarding transactions. Stock Picking Restrictions Make sure to avoid picking stocks that are prohibited by regulatory requirements for example of prohibition of cross-holdings in the same industry. Relative Pricing Pricing and expectations are compared with those in the industry to gauge market sentiments regarding the company and its brand value. Matching Risk and Return Requirement Greater the risk, greater should be the required return. Our investment philosophy is to ascertain the level of risk you are comfortable with and provide the maximum return possible for the level of risk.

7 Investment Procedures Completion of the Application Letter An application form is a form that needs to be filled that pan out details about the client and is in compliance to the Know Your Customer norms. Investment Management Agreement An investment management agreement is a contractual agreement between a client and a portfolio manager stating the terms and conditions applied to manage the stated assets. The client and portfolio manager must sign the investment management agreement. Signing of this agreement will provide the portfolio manager with the legal right to manage the client portfolio. Investment Management Agreement outlines the investment objective, investment tenure and benchmark/hurdle rate. Investment Policy Statement Investment Policy statement is a document drafted between a portfolio manager and a client that outlines general rules for the portfolio manager. This statement provides the general investment goals and objectives of a client and describes the strategies that the manager should employ to meet these objectives. Specific information on matters such as asset allocation, risk tolerance, and liquidity requirements would also be included in this document. The portfolio manager and the client both must sign the investment policy statement. Implementation of Internal operation modality with strong adherence to Code of Ethics Our ethical code is modeled on CFA institute Ethical Code of Conduct. Any issues regarding conflict of interest while managing the client portfolio will be resolved by our internal ethical code of conduct. Separate portfolio account to be opened with bank advised by Kriti Capital through tripartite agreement A separate account should be opened by Kriti Capital on behalf of the client, for this purpose a tripartite agreement should be signed, parties involved in that agreement will be, Kriti Capital, client and bank (advised by Kriti). This agreement will provide Kriti Capital (portfolio manager) the right to operate the portfolio bank account of client as per the requirement of the managed portfolio. KYC Form Know Your Customer Form to be filled by the Applicants for opening an account at the Bank or Financial Institutions.

8 Why PMS at Kriti Capital? Diligence We have qualified and skilled team of portfolio manager and analysts with proprietary analytical tools to assist you for Smarter Investments. All the team members are financial professional that pool their expertise for the better understanding of the market. The team has cumulative market experience of more than 20 years in the Capital Markets of Nepal and abroad. With tie ups with other market intermediaries we constantly follow markets through fundamental analysis, technical analysis and market sentiments. Customized With our customized facilities, you are not limited to simple conventional products. In addition to our numerous portfolio products, we can customize a unique portfolio for each individual or business based on the needs and expectations of each client. With such services, we ensure clients the complete satisfaction of finding the right solution to meet their objectives or aspirations. Privilege With our privilege service, you can have regular meetings with a dedicated manager on a 1-on-1 basis who will explain investment choices made according to market activity; enabling you to follow the performance of your portfolio more closely. Shared Vision Understanding our client s needs and expectations is very important to us. And meeting your needs and expectation would be our goal. You will receive regular updates with clear and detailed information about your portfolio. With ample information, we can devise strategies to your benefit which will be actively reviewed and managed. You will be kept informed of any significant change in the strategic allocation of your portfolio, and important decisions concerning the management of your portfolio.

9 Kriti Capital & Investments Ltd. Kriti Capital & Investments Ltd. is the licensed merchant banker as per the Merchant Bankers Regulation, 2007 to provide Portfolio Management Services. Kriti Capital & Investments Ltd. is a public limited company established by a group of professionals who have realized the need and understood the benefits of institutionalizing investment banking services in Nepal. Established with the motto of creating growth opportunities, Kriti Capital and Investments Limited aims to provide an efficient and effective medium for capital mobilization to earn superior return on capital. On the backdrop of creating superior financial return, Kriti Capital aspires to promote entrepreneurial and innovative initiatives and opportunities for committed and dynamic entrepreneurs. Kriti Capital extends wide and seasoned experience of its professional management, both in the local market as well as the international market, for the benefit of its client. For details of services provided by Kriti Capital please visit Contact Us Mathuri Sadan, 6 th Floor, Ganeshman Singh Path 1113 Ravibhawan, Kathmandu, Nepal Tel: , [email protected] Kriti Capital & Investments Ltd. is the merchant banker licensed from Securities Board of Nepal to provide Portfolio Management Services