14.11.2011

Jiří Pospíšil

Portfolio Manager

Raiffeisenbank a.s.

 

Not all investments cater to the needs of the inexperienced investor as well as those with years of experience in capital markets. But the WIOF Conservative Risk 3% Portfolio is tailor-made not just for investors who do not follow capital market themes, but also for more experienced investors looking to reach defined investment objectives and add diversity to their portfolio.

 

OVERVIEW


The Fund is designed with the aim of providing investors with long-term capital growth through investments in EUR bonds and equity markets. As the Fund’s name suggests, its risk profile is relatively lower with a maximum of 30% invested in equities and equity related securities and usually at least 60% of assets in fixed income securities denominated in EUR. Focusing on maintaining volatility at lower levels it follows an investment policy which looks to keep three-year historical volatility maintained at between 2 and 4%. The Fund’s investments cover the entire globe, but with the largest geographical allocations in Western Europe, followed by Central and Eastern Europe.

 

STABILITY AND SECURITY

Its low volatility and specific investment strategy provides investors with a stable fund. But it also has a number of other key advantages, including:

 

  • Relatively large portion of investment in equities giving the opportunity for handsome returns.
  • Portfolio consisting mainly of global bonds with A1/A+ rating and better.
  • Managed by one of the strongest financial institutions for commercial and investment banking in Central and Eastern Europe.

 

EXPANSIVE POLICIES

Beyond the benefits outlined above, a fundamental element of the Fund’s successful performance is its investment manager’s strategy. The manager’s current strategy takes into account a broad range of factors, all of them carefully monitored and considered so that the Fund can perform to its maximum. Among these is that until the end of 2012, the expansive monetary policies of the U.S. Federal Reserve and the European Central Bank (ECB) will continue to be dominant factors. As well as this, equities are also exhibiting solid potential. There is a stream of attractive corporate earnings while equities also offer a relatively high level of liquidity. They are also a good investment opportunity in that there continues to be a lack of any comparably good investment alternatives available.

 

POSITIVE ON EQUITIES

Crucial to the Fund is, of course, the conditions and performance of world markets and economies. In early September, the ECB lowered its GDP growth and inflation forecast. For 4Q2011 the bank is expected to interrupt its rate hike cycle and lower the key interest rate to 1%. Meanwhile, the U.S. Federal Reserve’s federal funds rate is to be maintained at just over 0% until mid-2013 at least. Against this backdrop, the manager intends to hold the duration of the bond allocation of the portfolio within a range from 2.0 to 2.5 years at least until 1Q2012. The bond position is expected to be held at 65%, divided up between corporate (30%) and sovereign German (20%) and CEE (15%) bonds.

In terms of the equity outlook, better corporate results could attract more investors to equities together with higher dividend payments and low interest rates. Equities are looking attractive, both in terms of P/E and P/B value ratios. At the same time, the manager expects equity markets to turn in positive performances over the next six months as worries over Eurozone sovereign debt, at least partially, recede. The manager intends to hold the equity allocation at levels of around 23%.

 

 

INVESTMENT MANAGER

The Fund’s investment manager is Raiffeisenbank a.s. (Raiffeisenbank). Raiffeisen is one of the leading Central and Eastern European players within the fund sector and had EUR30.7bn assets under management as of the end of 2010. Raiffeisenbank is a member of the Austrian Raiffeisen Financial Group, one of the strongest financial institutions for commercial and investment banking in Central and Eastern Europe.

 

IMPORTANT NOTE:

This report has been prepared for information only, and it does not represent an offer to purchase or subscribe to shares. World Investment Opportunities Funds (“WIOF”) is registered on the official list of collective investment undertakings pursuant to part I of the Luxembourg law of 20th December 2002 on collective investment undertakings as an open-ended investment company. WIOF believes that the information is correct at the date of production while obtained from carefully selected sources considered to be reliable. No warranty or representation is given to this effect and no liability can be assumed for the correctness or accuracy of the given information which may be subject to change at any time, without notice. Past performance provides neither a guarantee, nor an indication of future performance. Value of the shares and return they generate can fall as well as rise. Currency fluctuations, either up or down, may also affect value of the investment. Due to continuing market volatility and exchange rate fluctuations, the performance may be subject to significant changes over a short-term period. Investors should be aware that shares in the financial instruments entail investment risks, including the possible loss of the invested capital. Performance is usually calculated on the basis of the relevant NAV unless stated otherwise. Performance shown does not take account of any fees and costs associated with subscribing or redeeming shares. It is assumed that all dividends were reinvested. WIOF prospectus is available and may be obtained through www.1cornhill.com. Before investing in any WIOF Sub-fund(s) investors should contact their financial adviser / legal adviser / tax adviser and refer to all relevant documents relating to the WIOF and its particular Sub-fund(s), such as the latest annual report and prospectus that specify the particular risks associated with the Sub-fund, together with any specific restrictions applying, and the basis of dealing. In the event investors choose not to seek advice from a financial adviser / legal adviser / tax adviser, they should consider whether the WIOF is a suitable investment for them.