Wealth Management India
Non-Discretionary Portfolio Management Meeting Sophisticated Demands
Background
Successful investment management can take up an enormous amount of time. But it needn’t. Take advantage of a strategy that puts you at its heart. All aspects are geared to your objectives and your needs. The financial market developments of recent years have shown that professional and flexible asset management is an indispensable requirement if the right investment decision is to be made at the right time. This is precisely where our Non-Discretionary Portfolio Management comes into its own. Your Objectives as Priority With Non-Discretionary Portfolio Management, your money is invested in a way that is suited to the prevailing market situation, and you have complete control over investment decisions. You and your needs lie at the heart of this process. This is why we see individually tailored advice as the
key to successful portfolio management. And how we ensure that your portfolio is adapted to your personal life situation at all times. Consistent Market Proximity The investment strategy is regularly monitored by our strategy experts. This enables us to respond to market changes in a timely and flexible manner. It goes without saying that we undertake continual return monitoring and risk control, and to high quality standards.
ways. For the ongoing, objective-driven development of your assets you enjoy access to a wide range of investment solutions and services. Our structured advisory process also ensures a strategy that reflects your personal requirements at all times. Another incontrovertible benefit: You save yourself the enormous amount of effort that is required nowadays for professional and lucrative portfolio management. You also gain valuable time: time for yourself, as well as those things you would otherwise not have time for.
Your Additional Benefit: Time With Credit Suisse Non-Discretionary Portfolio Management you benefit in two
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Investment Profile
Stuctured Advisory Process 5 steps to success: The Private Banking advisory process at Credit Suisse Financia l Co
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Step 2: Financial Concept We use the results of the needs analysis to compile a personal financial concept together with you.
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Inves tor Profile
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Step 5: Implementation We provide professional expertise and support in implementing your selected strategy and managing your assets.
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Step 1: Needs Analysis An analysis of your needs and objectives sets an initial framework for the advice we provide.
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Investment St
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Step 3: Investor Profile We get to know your personal risk profile in order to construct investment solutions that are best suited to you. Step 4: Investment Strategy Taking your investment profile as a basis, we develop the right strategies for you.
Investment Profile Investment Goals
Investment Categories
Fixed income
Capital preservation Earnings through steady income
Low risk tolerance Minimal asset value fluctuation
min. % 37.5% 0% 0%
neutral 5% 75% 0% 20%
max. 62.5% 100% 0% 30%
Income oriented
Real-term capital preservation Returns predominantly based on steady income
Below-average risk tolerance As little asset fluctuation as possible
min. 0% 29% 7.5% 0%
neutral 7% 58% 15% 20%
max. 63.5% 87% 22.5% 30%
Balanced
Real-term capital preservation and long-term capital growth through steady income as well as capital gains
Average risk tolerance Acceptance of asset value fluctuations
min. 0% 18.5% 17.5% 0%
neutral 8% 37% 35% 20%
max. 64% 55.5% 52.5% 30%
Capital gains oriented
Long-term asset growth by focusing more on capital gains
Above-average risk tolerance Acceptance of increased asset value fluctuations
min. 0% 10.5% 27.5% 0%
neutral 9% 21% 55% 15%
max. 62% 31.5% 82.5% 22.5%
Equities
Long-term asset growth by focusing even more on capital gains
High risk tolerance Acceptance of substantial asset value fluctuations
min. neutral 0% 10% 0% 0% 37.5% 75% 0% 15%
max. 62.5% 0% 100% 22.5%
Liquidity 2
Risk Tolerance
Bonds
Equities
Alternative investments
Equity Advisory
Take advantage of the versatility of our equity advisory. At a glance. Place your trust in our financial experts’ skills, expertise and global network. Clearly structured and established processes guarantee that your assets are managed professionally. The most important aspect of our equity advisory process is the optimal allocation of your equity portfolio as it is a critical factor affecting the potential return on your investments. We know how hard you work to accumulate your wealth and we make wealth work for you. We at Credit Suisse help identify your investment profile reflecting your specific needs, expectations and your attitude toward risk and expected return and ensure that a diversified portfolio of securities is developed in consultation with you. Fundamental research-based stock advisory from highly experienced and qualified equity management team Ability to custom the portfolio according to investment needs and profile of the client Dedicated relationship managers to assist you with your needs Access to comprehensive investment research
Client’s active participation in the investment process and control over investment decisions Detailed documentation and reporting of all the executed transactions Regular information-sharing about the emerging trends, markets and investment results Continuous monitoring of investments on an ongoing basis for fine-tuning your financial strategy to your changing requirements Provide proactive client advice by offering optimization proposals and switch recommendations Capitalize on Credit Suisse’s expertise and experience in capital markets
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Mutual Funds
Do you want to realize your optimum investment potential? Funds offer you a multitude of benefits. In an increasingly complex market with growing numbers of new products, funds are an attractive and versatile investment opportunity. Thanks to our in-depth expertise, we can help you choose the right product for your needs. Over the years, a variety of products have emerged, offering investors numerous alternatives. It is all the more important that experienced specialists help you select the right product from the enormous choice available. How? By offering first-class products and developing the optimum solution for you to achieve your goals. An appropriate strategy plays a decisive role in successfully planning for the future. As an investor, you can choose from numerous possibilities, but your chances of success depend on which funds suit your individual investment strategy. That is why Credit Suisse attaches great importance to offering you thorough advice as well as a wide range of funds. Make the right decision for a successful future now – with funds from Credit Suisse. Success Is not a Coincidence. It’s the Result of Systematic Work. Funds are one of the most popular investment tools of all. As an investor, you benefit from their versatility, which helps you to implement your personal strategy successfully.
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Versatile Financial Investment The basis of a fund is the investment of assets made available by individuals or institutions. The fund manager invests the pooled assets – in accordance with the fund strategy you have chosen – in equities, bonds, money market paper, etc. or in a combination of the various asset classes. From various sectors and industries And from different regions and countries A Broad Range of Applications Not only are funds versatile, but their fields of application are too. From an individual investment to a complete package, funds are suitable for one-off investments, systematic savings and withdrawals.
In the early days of pearl farming, foreign bodies were implanted in wild mollusks that were brought in from the sea. The result depended on chance. Over the years, processes were perfected. Today, the thorough study of the living conditions and the cultivation of particularly suitable mollusk species allow efďŹ cient production with high-quality results. Just like the cultured pearls of the future, the success of Credit Suisse investment funds depends to a large extent on the quality of the processes and systematic product development.
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The probability ratio of finding a well-formed natural pearl is 1:15,000. Only about 20 of the world’s 10,000 mollusk species are capable of producing pearls suitable for jewelry. High demand was the mother of invention; pearls have been industrially produced since the early 19th century. Today, the results are so perfect that only an expert can recognize the true value of a pearl. That is also the task of a reliable financial partner, who recognizes an investment opportunity and exploits it to the client’s best possible advantage.
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A Range of Advantages
We look for an individual investment opportunity. And find the optimum solution for you. An investment strategy in line with your needs and objectives, the highest possible degree of flexibility for your investment, and the support of proven experts – these are just some of the advantages offered by funds. An investment with potential. Professional Management Combining the right securities in a fund requires in-depth knowledge of conditions and changes in the market, as well as considerable time devoted to analysis. To support their investment decisions, fund managers can call on the expertise of analysts and economists who continuously observe the financial markets. The most up-to-date information is thus available to them at all times in order to decide on the purchase and sale of securities. Reduced Risk As a Credit Suisse client, you strive for optimum results. It should be remembered that high returns generally involve higher
risks. For ideal risk diversification, your assets should therefore be spread over different forms of investment, sectors and terms. To help you diversify your portfolio, there is a balanced range of products available, allowing you to put together the ideal combination for your investment goals: Liquid funds Bond funds Gilt funds/Government securities funds Balanced funds Arbitrage funds Index funds Diversified equity funds Sector funds
Time Savings As an investor, you save on time-consuming research while maintaining an overview of your investments at all times. Although your money is invested in a variety of securities, you can monitor their performance by way of a single price: net asset value. High Flexibility Funds ensure a high level of liquidity. Your investments are not tied to specific maturities; as a rule, you can sell your fund units at any time. Funds enable you to invest in different sectors, regions and countries.
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Fund Product Overview
Success is no coincidence. But the result of right decisions. To produce sustainable results, investments must be tailored to suit the personal perspectives of the investor. Our range of funds gives you the flexibility you need.
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Liquid Funds Liquid funds invest according to the principle of risk distribution in money market paper and other fixed-income securities with short maturities. These include time deposits, bond issues with variable interest rates or bonds with short residual maturities. Money market funds are primarily suited to managing your liquidity and serve as short-term investments. They are characterized by a very constant performance and are one of the safest forms of investment.
Gilt Funds/Government Securities Funds Gilt funds invest assets according to the principle of risk distribution in government securities issued by the state and the central government. A variety of government securities are available in the markets of varying maturities. Depending on the maturity, they involve various investment risks. These funds are ideal in a falling or stable interest rate scenario if you are aiming for a longer investment horizon and wish to achieve higher returns than with money market funds.
Risk: very low Returns: low to medium Investment horizon: from a few months
Risk: low to medium Returns: medium Investment horizon: 1–3 years
Bond Funds Bond funds invest assets according to the principle of risk distribution in securities with fixed or variable interest rates. A variety of bonds are available in the capital markets. Depending on the maturity, credit rating and issuer, they involve various investment risks. Compared with bonds as direct investments, they do not have a fixed maturity with a predetermined coupon – the ideal tool if you are aiming for a longer investment horizon and wish to achieve higher returns than with money market funds.
Balanced Funds Balanced funds invest assets according to the principle of risk distribution in equities as well as bonds. Balanced funds are an excellent investment option if you want to bet on the longer-term growth potential of equity markets along with some preservation of the capital through bond exposure. The aim of balanced funds is to provide both growth and regular income as such funds invest both in equities and fixed income securities in the proportion indicated in their offer documents. These are appropriate for investors looking for moderate growth.
Risk: low to medium Returns: medium Investment horizon: 1–3 years
Risk: low to medium Returns: medium Investment horizon: from 3 years
Fund Product Overview
Arbitrage Funds Arbitrage funds invest in assets according to the principle of risk distribution in equities as well as try and capitalize on the price differences between the spot market and the futures market. Because of the time difference, there is a price difference between the spot and future prices of any stock. The ideal tool if you are aiming for a longer investment horizon and wish to achieve better returns than with money market funds or bond funds.
Diversified Equity Funds These funds invest in a diversified manner in the equities of a certain sector – depending on the strategy, and also in equities of small and medium-sized enterprises. Diversified equity funds are an excellent investment option if you want to bet on the longer-term growth potential of equity markets and are prepared to accept higher price fluctuations. The various equity funds available offer you the greatest possible scope when implementing your individual investment strategy.
Risk: medium Returns: low to medium Investment horizon: 1–2 years
Risk: high Returns: medium to high Investment horizon: from 3 years
Index Funds Index funds invest in equities of the underlying index and aim to replicate the movement of the index. They invest in the securities in the same weightings as an index. These funds are a good investment option if you want to bet on the longer-term growth potential of equity markets with lower price fluctuations.
Sector Funds These funds invest in the equities of a certain sector – depending on the strategy. Sector funds are an excellent investment option if you want to bet on the longer-term growth potential of a particular sector and are prepared to accept very high price fluctuations.
Risk: low to medium Returns: medium Investment horizon: from 3 years
Risk: very high Returns: medium to high Investment horizon: from 3 years
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Structured Products
There are many opportunities. The challenge is to select the best ones. Structured products are proven alternatives to the traditional asset classes – cash, bonds and equities. They have been a fixture in the international financial markets for many years. Combinations of derivatives and financial instruments create structures that have significant risk/return and/or cost saving profiles that may not be otherwise achievable in the marketplace. Structured products are designed to provide investors with highly targeted investments based on their specific risk profiles, return requirements and market expectations. Structured products are an efficient alternative to equity and fixed-income investments. They offer investors full or partial capital protection combined with equity-linked performance. As such, they are mainly used within the secure part of a portfolio to increase returns with limited risk on capital.
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They offer many advantages over other types of investments, including An opportunity to combine a capital-protected investment with a return linked to equity markets Risk-controlled access to volatile asset classes and alternative investments An efficient diversification tool A flexible investment tool An efficient way to take advantage of a given market scenario Disadvantages For structured products with full capital protection, such protection is at maturity only For all structured products with a cap, returns will be limited and therefore investments in such notes may underperform in comparison to a direct investment in the underlying Performance of structured products is generally reflected only at maturity and not during the lifespan of the product
Aside from color, size and symmetry, luster is a decisive criterion for the value of a pearl. The word “luster” refers to the pearl’s delicate rainbow shimmer, and luster depends on the quality of its formation. Even cultured pearls vary enormously, and only 0.5 percent of them are classified as perfect. Finding these examples and combining them in the best possible way is of decisive importance, and requires a great deal of expertise and experience – in pearl farming just as in the composition of your investment funds.
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Real Estate Funds
Development needs growth. Build the foundations for both. Real estate assets are an excellent way of diversifying. You can count on the expertise offered by our internationally experienced real estate specialists. Real estate funds (REFs) in India are organized as venture capital funds, that is, as funds established either as trusts or a company, including a body corporate. These have a dedicated pool of capital, which is invested primarily into equity and equity-related instruments of venture capital undertakings primarily engaged in real estate. REFs may establish different close-ended schemes and issue units in respect of those schemes to investors. Advantages of Real Estate Funds Professional management - Fund management team takes the tasks of identifying, sourcing, monitoring deals and relieves investors of the necessity to assess projects singlehandedly and minimize risks related to real estate transactions Strong diversification – Fund assets are simultaneously invested in several construction projects and, therefore, each investor’s funds, regardless of their amount, are diversified (in other words, distributed among several real estate projects). Strict selection of developers, selection of the most liquid apartments, monitoring developers’ financial condition and construction work progress also serve to mitigate risks. Potential of generating long-term capital appreciation Transparency - Fund’s attractiveness can be attributed to its open investment portfolio structure, availability of regular reporting and adherence to venture capital fund guidelines.
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Disadvantages Illiquid investment Difficult to measure performance during holding period Other Investment Avenues for Participating in Real Estate Include Real estate mutual funds – Real estate mutual fund scheme means a scheme of a mutual fund which has an investment objective to invest directly or indirectly in real estate property and is governed by the provisions and guidelines under SEBI (Mutual Funds) regulations. Recently, SEBI issued and approved the guidelines for real estate mutual funds. Once certain issues relating to valuation and accounting have been addressed, investors will see the launch of real estate mutual funds. Real estate investment trust (REITs) - REITs, are entities that invest in different kinds of real estate or real estate related assets. They own and most often actively manage income-producing real estate. They provide ongoing dividend income along with the potential for long-term capital gains through share price appreciation. A proposal for introduction of real estate investment trusts in India is also on the agenda of SEBI.
Pearls are used primarily for jewelry, and have been for thousands of years: The oldest peace of pearl jewelry, created 4,300 years ago as a burial object for a Persian king, is in the Egyptian Museum in Cairo. However, in the past, pearls were used mainly to embroider festive evening dresses and robes for emperors and queens. Today, pearls are fashionable all over the world and are to be found in all manner of jewelry. Information that is important for your investment decisions is also universally accessible.
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Private Equity Funds
La Peregrina is probably the most famous pearl in the world. Found in the 16th century off the coast of Panama, it is renowned for its extraordinary beauty. King Philip II of Spain gave it to his bride, Mary Tudor (Queen Mary I of England). Later, Napoleon III and Queen Victoria owned the pear-shaped pearl. In 1969, Richard Burton bought La Peregrina at a Sotheby’s auction and had it mounted in a necklace for Elizabeth Taylor. Credit Suisse also has an eventful history and centuries-old tradition – as a solid basis for your successful investment in funds.
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Private Equity Funds
Tomorrow’s winners need one thing more than anything else: experience. Private equity funds give you the opportunity to invest in high-growth companies at an early stage of their development. Private equity means the investment capital provided by private and institutional investors to the wide range of privately owned companies. By buying into private equity funds, private investors can also participate in and benefit from this exciting segment. Investment scenarios of private equity funds range from providing finance in the start-up phase (venture capital), to investing in businesses once they are established and have stable cash flows (buyout). In addition, capital platforms can be created for succession solutions at small and medium-sized enterprises or for a spin-off of individual business units by large companies. Advantages of Private Equity Funds Active management Potential to generate attractive returns in the long term Increased portfolio diversification Broad universe of investment opportunities Inefficient market - access to proprietary information Alignment of interests Performance fees based solely on realized gains (unlike hedge funds) – No pressure to manage quarterly earnings Disadvantages Illiquid investment Difficult to measure performance during holding period
Investment Strategies of Private Equity Funds Mezzanine Provides the “middle layer” of financing used primarily in buyout and later-stage growth investments, junior to debt and senior to equity. Returns are generally comprised of current income (interest) as well as equity kickers. Infrastructure Invests equity in businesses that own and/or operate facilities and networks that provide essential, everyday services to society. These assets are typically long duration with stable, yield-dominated returns, and examples include air and sea ports, toll roads and energy transmission or natural gas storage facilities. Buyout Purchases a significant portion or obtains majority control, of a mature company to focus on its financial, structural and operational issues in order to improve performance for strategic sale, IPO or recapitalization. Special Situations Includes secondary funds and distressed debt funds. Secondary funds purchase existing limited partnership interests in private equity funds in order to produce private equity-like returns while minimizing risk. Distressed debt funds acquire controlling stakes in companies and convert debt into equity through reorganizations of the company. Venture Capital Provides financing for a start-up company which, at the early state of its life cycle, does not have access to capital from traditional sources (banks, lending institutions, public markets).
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Contact
Opt for a successful investment. Rely on Credit Suisse. Are you interested in investing in funds? Or would you like to examine your existing portfolio and exploit every opportunity for optimizing it? Simply contact your Credit Suisse advisor. We will deďŹ ne the basis for your personal investment strategy in an interview, and support you in your future successes.
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Whatever your objectives are, we would like to help you achieve them: +91 22 6777 3777
This document is provided to you for your information and discussion only. It is not a solicitation or an offer to buy or sell any security or other financial instrument. Any information including facts, opinions or quotations, may be condensed or summarized and is expressed as of the date of writing. The information may change without notice and Credit Suisse Securities (India) Private Limited is under no obligation to ensure that such updates are brought to your attention. The price and value of investments mentioned and any income that might accrue could fall or rise or fluctuate. Past performance is not a guide to future performance. If an investment is denominated in a currency other than your base currency, changes in the rate of exchange may have an adverse effect on value, price or income. You should consult with such advisor(s) as you consider necessary to assist you in making these determinations. Nothing in this document constitutes legal, accounting or tax advice. Credit Suisse Securities (India) Private Limited does not advise on the tax consequences of investments and you are advised to contact a tax advisor should you have any questions in this regard. The levels and basis of taxation are dependent on individual circumstances and are subject to change. This document has been prepared from sources we believe to be reliable but we do not guarantee its accuracy or completeness and do not accept liability for any loss arising from its use. Credit Suisse Securities (India) Private Limited reserves the right to remedy any errors that may be present in this document. Certain investment products mentioned in the document may not be available on a regular basis. Credit Suisse Securities (India) Private Limited its affiliates and/or their employees may have a position or holding, or other material interest or effect transactions in any securities mentioned or options thereon, or other investments related thereto and from time to time may add to or dispose of such investments. Credit Suisse Securities (India) Private Limited or its affiliates may be providing, or have provided within the previous 12 months, significant advice or investment services in relation to the investment concerned or a related investment to any company or issuer mentioned. This document is intended only for the person to whom it is issued by Credit Suisse. It may not be reproduced either in whole, or in part, without our written permission. The distribution of this document and the offer and sale of the investment in certain jurisdictions may be forbidden or restricted by law or regulation. Investments may have no public market or only a restricted secondary market. Where a secondary market exists, it is not possible to predict the price at which investments will trade in the market or whether such market will be liquid or illiquid. As such investments which will not be listed or traded on any exchange, pricing information may be more difficult to obtain and the liquidity of the investments may be adversely affected. A holder may be able to realize value prior to an investment’s maturity date only at a price in an available secondary market. The issuer of the investment may have entered into contracts with third parties to create the indicated returns and/or any applicable capital protection (in part or in full). In the event of default by the issuer of the investment, and/or any third party the investment any income derived from such contracts is not guaranteed and you may get back none of, or less than, what was originally invested. You may have to accept smaller returns on an investment relative to a direct investment in the underlying index, basket, etc. because of the costs involved in providing the capital protection. Such capital protection normally only applies if the investment is held until maturity. The amount of initial capital to be repaid may be geared, which means that a fall in the underlying index or securities may result in a larger reduction in the amount repaid to investors. Credit Suisse Securities (India) Private Limited is an independent legal and regulated entity within the Credit Suisse Group and is licensed and regulated by the Securities and Exchange Board of India to provide Portfolio Management Services in India. The registered addresses of Credit Suisse Securities (India) Private Limited is 9th Floor, Ceejay House, Plot F, Shivsagar Estate, Dr Annie Besant Road, Worli, Mumbai – 400 018, India.
Wealth Management Business CREDIT SUISSE SECURITIES (INDIA) PRIVATE LIMITED 10th Floor, Ceejay House Plot F, Shivsagar Estate Dr. Annie Besant Road Worli, Mumbai 400 018, India Phone: +91 226 777 3777 www.credit-suisse.com/portfoliomanagement
SOLE 6 5.2008
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