Discretionary Portfolio Management

Discretionary Portfolio Management

In determining the structure of underlying asset-class performance fees for our Discretionary Solutions we have sought to standardize the basis for investment-manager remuneration. Performance-based fees are set at levels that rewards for desired outperformance without encouraging undue risk-taking. In determining a fair and equitable performance-based fee, we consider the mandate of each portfolio to devise a basis that is consistent with the desired investment return and expected risk of the portfolio. We structure our underlying performance fees with a number of key elements to ensure fair treatment of all parties and alignment of interest. Please find below the options for your kind perusal:

Proposed portfolio size BDT 20 (twenty) lac or any amount above than BDT 20 lac
Minimum Investment Period 2 (two) Years
Portfolio Manager EBL Investments Limited
Particulars Fees and Charges
Documentation Charge Tk. 500
Management Fee 1% per Annum on Total Market Value of securities.
Management Fee Payment Fund Management Fees shall be charged on monthly basis.
Brokerage Fee 0.40% on transaction amount
Early withdrawal charges Within 1 year 5% penalty and after 1 year but before maturity 1% penalty will be charged on AUM.
CDBL Transaction Fee N/A
* management reserve right to change any charge.
Particulars Fees and Charges
Documentation Charge Tk. 500
*Hurdle Rate 10.00% per annum
Management Fee 1.50% on Total market Value of securities per annum, contingent on achievement of *Hurdle Rate. If not achieved, management fees will be 0.75% and excess charged fees (If any) will be adjusted over the following quarter.
Management Fee Payment Fund Management Fees shall be charged on monthly basis. If Net Annual Return of the portfolio is below Hurdle Rate, Excess charged fees (If any) will be adjusted over the following quarter.
Brokerage Fee 0.40% on transaction amount
Early withdrawal charges Within 1 year 5% penalty and after 1 year but before maturity 1% penalty will be charged on AUM.
CDBL Transaction Fee N/A
* management reserve right to change any charge.
Particulars Fees and Charges
Documentation Charge Tk. 700
*Hurdle Rate 10.00% per annum
Management Fee 1.50% on Total market Value of securities per Annum. contingent on achievement of *Hurdle Rate. If not achieved, management fees will be 0.75% and excess charged fees (If any) will be adjusted over the following quarter.
Super Performance fee If Net Annualized Return is above 12%, Super Performance fee Charged @ 1.75% on Total market Value of securities per annum.
Management Fee and profit Payment Fund Management Fees shall be charged on monthly basis. If Annual Return of the portfolio is below Hurdle Rate, excess charged fees (if any) will be adjusted over the next quarter.
Brokerage Fee 0.40% on transaction amount
Early withdrawal charges Within 1 year 5% penalty and after 1 year but before maturity 1% penalty will be charged on AUM.
CDBL Transaction Fee N/A
* management reserve right to change any charge.

Management Fees:

This is the fixed amount charged on the total asset value, and the rate varies under different schemes.

Hurdle Rate:

The amount by which a manager needs to beat the performance-fee benchmark before earning performance fees.

Super Performance Rate:

The percentage of the performance above the performance-fee hurdle that the manager shares in.

Measurement Period:

The period over which the manager’s performance is measured to determine if a performance fee is payable. Monthly Return of the portfolio is subject to market performance, political and economic condition of the country. Accumulated Profit/Realized gain will be distributed on quarterly basis prior to review of the portfolio performance time to time based on mutual understanding by annualizing certain rate of return.

Advantages:

  • Return expected to be higher than the existing bank deposit rate
  • Totally tax free income and tax allowance for individual investor
  • Competitive advantage in terms of cost and services.
  • Expert and active fund management by professional fund managers
  • Customized return objectives based on client’s risk tolerances.
  • Portfolio and transaction report on quarterly basis.

Documentations:

  • Duly filled account opening form
  • Limited Power of Attorney to EBLIL
  • Advisory fund management Agreement with both parties
  • All required documents to be submitted for record.

Investments Guideline:

  • Take an appropriate level of investment risk
  • Maximize return at that risk level
  • Maintain a level of cash reserve in order to meet short term emergency expenditures
  • Periodically monitor and revise the portfolio as required

Fair Dealing to the clients:

The investment process has been carefully designed to ensure:

  • Professional judgment and responsibility in every level of decision making
  • Removal of all sorts of conflicts of interest
  • Fair dealing and objectivity in every transaction
  • Observance of law and other fiduciary duties

Declaration on Risk and return:

Capital market is great deal of risk but by professional but through long term approach risk can be minimized. But political or social instability, adverse climatic condition, or change in any law or regulations of the territory can affected investment decision.

Where does Discretionary Solutions show performance fees paid to Investment Bank?
They will be shown (if applicable) on the monthly fund fact sheets for each portfolio. Performance fees are expressed as the percentage of the total portfolio paid to underlying investment bank over the past 12 months.
Who calculates if performance fees are payable, how often is this done, and how are these verified?
We calculate performance fees monthly as soon after month-end as possible. These calculations are sent to each client for verification. If agreed, these fees are deducted from the portfolio and held in the performance-fee account until the crystallization date, when the balance outstanding in the account is paid to the investment manager. Performance-fee calculations are independently verified on an on-going basis by our internal and external auditors.
Do all clients pay the same performance fees?
No. Both the performance fees and the fixed management fees are subject to changes and results of the schemes that the clients choose to have.
Is this possible to achieve Hurdle rate?
EBLIL manage the fund by an experienced team with the guidance of Investment Policy. To minimize the risk, fund will invest in various asset classes considering growth and long-term return objective. Hence, it is possible to achieve the hurdle rate at the end of the maturity.