Wealth & Finance Finance Awards 2015

www.wealthandfinance-intl.com 9 With this in mind, Invescap has been assessing the global market and ensuring that we always provide a service which fulfils its needs. We notice that low and sometimes negative interest rates pose a significant challenge to most investors. The increasing of maturities for bonds will only worsen the negative impact on portfolios of future increases in interest rates. Should investors persist in this investment approach, very substantial losses will inevitably occur in this important market segment. This will impact pension funds as well as investors needing fixed income returns. To “balance” these low fixed income yields, many investors also invest an increasing proportion of the portfolio in highly risky assets such as equities. The portfolio becomes increasingly exposed to interest rates risks as well as equity market risks. The overall risk/return profile of the portfolio deteriorates as a consequence. This may work for some time but when the music stops, things get very complicated and corrective actions may become prohibitive or simply impossible to implement. We believe that a more rational approach considering those realities is to reasonably increase yields on the fixed income component of the portfolio without overly increasing the duration of bonds and keeping a good credit quality in order to prevent the potentially disastrous effect of a bond default. In such cases, investors must not overly rely on equities for achieving investment objectives. For the more risky part of the portfolio, which is often invested in equities, one should mitigate downside risks upfront by adding capital preservation features to such investments. When those two major components of most portfolios are enhanced in such way, that is the fixed income exposure and the equity exposure, the overall returns are enhanced and importantly, the investments are robust in the case of market shocks coming from the equity market, the credit market as well as from change interest rates levels. Consequently, the capital preservation features of such portfolios are enhanced. Liquid investments as well as short durations should also be a prerequisite of investors going forward. There are also a number of challenges and opportunities inherent in the region we operate in. Although we do have growing operations interna- tionally, an important operational centre for Invescap is Switzerland, a country which is adapting rapidly to the fluctuating European economic situation. Switzerland as a country has suffered significant changes in its core business model which is at the heart of the traditional private banking. International pressures have forced Switzerland to forfeit its banking secrecy to large extend. Those events destabilized and had profound impacts on the industry. Therefore solutions had to be found and actions from Swiss bankers had to be put forward to create a new paradigm. One response to this major change in paradigm is for the Swiss banks to add value in its asset management activities such as the develop- ment high value investment products and investment funds. In this sense, the investment products offered by Invescap are perceived as a relief and are welcomed, in a country which remains, an important financial market. With regards to the future of our business, we have a number of exciting plans for the expansion of our firm and our continued success. We are keen to develop our advisory business and most importantly to develop our asset management business with the launch of three investment funds by year-end. A number of our investment products are highly suitable for the purpose of managing investment funds. Therefore we are also launching a capital preservation fund which has a significant positive participation to world equities, when equities go up with sub- stantial capital preservation features in the case of a market correction. In addition, the maturities of each investment products within the fund are relatively short as well as having a high liquidity, such features being favourable to investors. We are also launching a yield enhancement fund aiming at returning approximatively 6% per annum after fees to investors with limited volatility and a defensive character from a risk perspective. The duration of this fund is also short, 18 months on average, and has a high liquidity as well. Additionally, we are launching a short-term fixed income fund target- ing a 3% return per year net of fees and which is exclusively based in investment grade sovereign credit risks. As for the other Capital Preservation Fund and the Yield Enhancement Fund, the Short-Term Fixed Income Fund of Invescap has a high liquidity and a short duration as well. We are also developing three additional investment funds to be launched subsequently. As for the initial funds, these coming funds also provide high value-added to investors, are adding diversification to portfolios as well as having a clear capital preservation orientation. Ultimately, the overriding philosophy of Invescap is to provide investors with high added value in order to enable them to meet investment objectives, to allow them to diversify away from traditional funds as well as a definite capital preservation feature which is beneficial in cases of market downturn as well as being reassuring to investors in such cases. We believe, at Invescap, that such values meet the core long-term needs of any serious investor, and in the future will continue to strive to achieve these objectives.