Growth and Income Portfolio Issuer: MWF Financial Limited Available in US Dollars
Contents 1. Portfolio Overview 2. High-Frequency Trading at a Glance 3. How is the Return Calculated? 4. Portfolio Holdings 5. Important Points to Note 6. Considering This Portfolio 7. Past Performance Indicators 8. Management Fees 9. Terms and Conditions 10. Schedule
Please take time to read this brochure carefully and thoroughly, including the terms and conditions. Information included in this brochure does not constitute legal, tax, or investment advice, and should not be interpreted as a solicitation of investment from jurisdictions where MWF Limited has no legal right to do so. If you are unsure about the contents of this brochure, or this portfolio’s suitability towards your needs, you should seek advice from an accredited advisor, or any other investment professional.
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1. Portfolio Overview
Summary
The total return is calculated by the issuer at the end of each week, and posted to your account on Friday at 18:00 Eastern
The Growth and Income portfolio is a medium-risk investment
Standard Time. Due to extreme market volatility in the last
option aimed at investors looking for longer-term placements
moments of trading, some assets are liquidated before the
that earn higher returns than our more flexible products.
closing quote has been set. Therefore, a marginal discrepancy between published and actual figures, in aggregate weekly
This portfolio utilizes high-frequency trading techniques while
returns, can occur.
following the upward and downward market trends of 16 U.S. stocks. Assets are diversified between 2 large-cap and 14 midcap stocks. All assets are liquidated at the end of the business
Repayment of Capital
day. At the end of each week, all daily gains are summed up, and you will accrue a return equal to the portfolio’s performance
This portfolio does not have a fixed term. However, withdrawal
for that week.
of capital is restricted for the first 180 calendar days following the day of investment. Any subsequent addition to the portfolio will trigger a new 180 calendar day restriction on withdrawal. A
Short Positions
premature withdrawal fee of 60% will be levied on any capital withdrawn prior to the end of this initial restriction.
This portfolio trades both long and short positions. Shortposition trading allows this portfolio to earn income on declining
Capital can be repaid in full upon the 181st calendar day
market trends. Short trades are executed by ‘borrowing’ stock,
following investment.
selling it at the current bid price, and repurchasing moments later when the asking price is lower than the price at which the borrowed stock was sold.
Reinvestment of Return This portfolio requires you to reinvest a minimum of 50 percent
Potential Return
of your returns back into the portfolio. Reinvestment levels can be set at either 50 or a 100%. Reinvestment of your return has a
The Growth and Income portfolio follows upward and downward
potential to boost your aggregate returns by as much as 40%.
market trends of 16 U.S. stocks. The sum difference between opening and closing quotes of stocks, that the portfolio is composed of, will be translated into a daily return which is paid
Minimum Guaranteed Earnings
into the investor’s current account at the end of each week. The aggregate value of the stocks that portfolio trades is taken at
This portfolio guarantees minimum earnings of 3% per week.
the end of the business day. A positive gain is translated into
Minimum earnings are paid in case portfolio earnings for a
a proportionate gain on investment, then the accrued gains on
given week are less than 3%.
investment are summed up and paid into your account at the end of each week. In cases where the aggregate value of the stocks taken at the end of the trading day is less than the value taken at the beginning, a profit in the amount of the total decline in that value is added to the gains to be paid at the end of each week. The amount of profit paid on short-position trading gains cannot exceed 0.8% per day.
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2. High-Frequency Trading at a Glance Summary High-frequency trading is an innovative investment strategy that allows us to place multiple buy/sell orders on a range of securities during the course of the day. Highly sophisticated software, designed by our in-house IT team, follows the market
HFT 26% of all market trading volume in 2006
trends and is able to make informed trading decisions with minimal intervention from portfolio managers. This strategy allows capital to be invested into securities for no more than a few minutes, and therefore risks associated with high-frequency trading are miniscule.
HFT 61% of all market trading volume in 2009
HFT as a Low Risk Investment Strategy There are several reasons why high-frequency trading does not involve the same amount of risk as conventional equity trading. First, firms that utilize high-frequency trading do not accumulate
HFT 73% of all market trading volume in 2011
positions. This means that firms such us ours are not exposed to risks associated with market downturns. Second, highfrequency trading does not require firms to employ significant leverage, thereby limiting a firm’s exposure to risks associated
It is evident that high-frequency trading is becoming more
with the inherent instability of equity markets. Lastly, firms that
and more popular among many investment firms. However,
are engaged in high-frequency trading usually liquidate all their
until recently, HFT had remained largely in the hands of small
positions at the end of the day, thereby limiting the risk of losses
investment funds who were in the market mostly for themselves.
that may occur in after-hours trading. Although some large hedge funds utilize HFT for part of their placements, none of the firms currently on the market offer
HFT’s Rise in Popularity
portfolios based exclusively on high-frequency trading. The reason for this is obvious: Investment portfolios that subscribed
High-frequency trading firms account for 3% of approximately
over $500 million would significantly influence the market trends
22,000 investment firms on the market. The total equity trading
of the securities that they would trade, thereby defeating the
volume of high frequency trading firms accounts for 73% of total
purpose of high-frequency trading strategy altogether. Instead
all-market trading volume.
of following market trends, they would set the trends, thereby making it impossible to profit from their operations.
Limited Subscription Portfolios Our portfolios have limited subscriptions because we intend to remain a mid-size investment firm. It is therefore feasible for firms like ours to utilize HFT exclusively in our investment portfolios, and therefore bring the advantage of this innovative investment strategy to private and institutional investors such as yourself.
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3. How is the Return Calculated?
4. Portfolio Holdings
Investors are offered 100% participation in a portfolio’s
This portfolio invests in 16 U.S. stocks. 2 of these are large-cap1
performance. All gains on said portfolios are paid to investors as
stocks and 14 are mid-cap2.
returns.
12% Large-Cap Returns are calculated by designated issuers at the end of
86% Mid-cap
each business day by subtracting the aggregate value of each stock an invested portfolio trades at the beginning of the trading
2% Gold and Convertible Bonds
session, from the value of each stock within the same portfolio at the end of the trading session. In cases where the aggregate value of stocks the portfolio trades at the end of the trading day is less than in the beginning, a profit in the amount of the total
Table of Holdings:
decline in the value is added to the gains to be paid at the end of each week. The amount of profit paid on short position trading
Symbol
Company Name
gains cannot exceed 0.8% per day.
MSFT
Microsoft Corp.
GE Daily returns are proportionate to the change in portfolio value
General Electric Co.
JBLU
and are paid to current accounts at the end of each week. This
JetBlue Airway Corp
PAY
portfolio cannot generate a loss.
VeriFone Systems, In.
RE
Everest Re Group
PNR HFT strategy is applied during the trading session in this
Pentair, Inc.
TFX
portfolio. Managing software, under the careful observation of
Teleflex, Inc.
LUV
the portfolio managing staff, follows the upward trends of the
Southwest Airlines
URS
equities that make up the portfolio. Holdings are then liquidated
Urs Corporation
KWK
on downward movements and reacquired when stock prices
Quicksilver Resources, Inc.
HLX
have reached the level where managers believe a further rise
Helix Energy Solutions
GGG
in stock prices is sustainable. This portfolio also utilizes short-
Graco, Inc.
ENDP
trades and takes advantage of declines in stock prices in this
Endo Health Solutions
CY
same manner.
Cypress Semiconductor
CNL
Cleco Corporation
ALK
Alaska Air Group
Although HFT would allow this portfolio to yield profits on all intraday upward movement of the stocks, our conservative
1
With market capitalization in excess of $10 billion
approach to risk restricts us from engaging in this kind of
2
With market capitalization below $10 billion
market-making. Two percent of each investor’s portfolio holdings is placed in convertible bonds and gold as a reserve to cover any minor losses that may be encountered during trading operations. Income from this two percent is also held in reserve.
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5. Important Points to Note
6. Considering This Portfolio
◆ This portfolio takes advantage of declining market trends.
To help you decide if this portfolio is right for you, here is a
In cases where the aggregate value of the stocks this
summary of some key points you should think about. If in
portfolio trades at the end of the trading day is less than
doubt, contact your accredited advisor for further help.
the beginning, a profit in the amount of the total decline in that value is added to the gains to be paid at the end of the week. The amount of profit paid on short-position trading
Yes, this portfolio is right for me because:
gains cannot exceed 0.8% per day. ◆ I want to earn the highest return possible on my ◆ Capital is guaranteed only if its withdrawal is requested after 180 calendar days from the initial investment. The 180 day
investment with Mutual Wealth. ◆ I want to earn higher than average returns on
restriction will begin again in cases where additional funds
investment by investing into a firm utilizing HFT and
are added to the existing portfolio balance, excepting the
other modern technological trading methods.
funds which are automatically reinvested into the portfolio from that portfolio’s returns.
◆ I am happy to invest with a medium-sized investment firm. I believe my account will receive more attention due to the subscription limits that the company has
◆ Investment portfolios are not guaranteed by a third party. MWF Financial Limited is not a bank, and does not participate in any kind of Deposit Compensation Scheme. Repayment of capital depends on the ability of MWF Financial Limited to pay such amounts when they are due.
on its investment products. ◆ I will not need to access my original deposit (capital) in the first six months following my initial investment. ◆ I am comfortable with my investment being directly linked to market performance. ◆ I want my capital to be guaranteed and I want to be
◆ Minimum investment into this portfolio is $100. The portfolio has a limited subscription. As a consequence, we do not accept investments in excess of $5 million into this portfolio.
sure that I will not receive less than I originally invested. ◆ I like the idea of earning income on declining as well as rising markets.
Investors who wish to invest amounts in excess of $5 million should contact our Wealth Management team for further advice. Such investment amounts can be accommodated by
No, this portfolio is not right for me because:
other available investment products. ◆ I may need to access a substantial part of my original ◆ Income from this portfolio is subject to our standard management fees. Management fees are deducted at the time the income is credited to your account. See
deposit (capital) within the first six months following my initial investment. ◆ I do not trust medium-sized, unregulated investment
the Management Fees Table of this brochure for further
companies. I wish to invest with a large, known and
information.
reputable firm. ◆ I am not comfortable with my investment being directly linked to market performance. I need the peace of mind that comes with fixed returns on investment. ◆ I believe that management fees levied on portfolio income are excessive. ◆ I am not comfortable with investing outside my country.
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7. Past Performance Indicators
8. Management Fees
Please keep in mind that past performance does not guarantee
MWF Financial Limited operates a fair and transparent fees
future results. It can only serve as an indicator of how this
structure. Income earned on portfolios is passed on to investors.
portfolio may perform in the future.
MWF Financial Limited does not retain any part of the income, with the exception of management fees, that are fixed for the
Time Period
Return
whole term of investment. The management fees vary according
30-Jan-2013 – 01-Mar-2013
10.1%
to the amount invested by the client. Below is the table that
01-Dec-2012 – 01-Mar-2013
27.1%
01-Sep-2012 – 01-Mar-2013
59.5%
Amount Invested
01-Mar-2012 – 01-Mar-2013
203%
Less than $5000
6%
1%
Inception – 1-Mar-2013
292%
$5001 - $25000
4%
1%
Greater than $25001
2%
1%
Average weekly in the year ending 1 March 2013
4.1%
shows how management fees are calculated: Regular Investor Accredited advisor
As of 10 August, 2012, the average weekly income paid by this portfolio since the start of the year was 3.3%. The figures above are indication of portfolio
Private and Institutional clients pay a flat rate of 2% on income
performance only and do not take into account minimum guaranteed earnings.
received on their investments with MWF Financial Limited.
Terms and Conditions This investment portfolio is marketed and sold through Fleet Mutual Wealth Limited, Hong Kong. The issuer and manager of the portfolio is MWF Financial Limited, Cyprus. 1. I nvestment into the Growth and Income portfolio (MWAT) is subject to the general terms and conditions of investments posted on our company website and spelled out in this brochure. This portfolio is open exclusively to current account holders of Fleet Mutual Wealth Limited. 2. I nvestment into the Growth and Income portfolio constitutes a “private placement” with MWF Financial Limited. By investing, the client does not acquire shares of MWF Financial Limited. Neither does the client acquire shares in other publicly traded companies that constitute part of the Growth and Income portfolio. 3. By investing into the Growth and Income portfolio, the client executes an investment contract. The terms of the investment contract include the general terms and conditions and the terms and conditions of investment into the Growth and Income portfolio. 4. P rofits on investment in the Growth and Income portfolio are subject to management fees, per the Management Fee Table, as provided in this brochure. 5. T he minimum term of investment into the Growth and Income portfolio is 180 calendar days. Full or partial withdrawals from the portfolio, prior to the expiration of the full 180 day period from initial investment, will carry a 60% early withdrawal penalty. Additional investments into this portfolio are subject to the minimum term, excepting the funds automatically reinvested from said portfolio’s returns. 6. 5 0% of the profits on investment from the Growth and Income portfolio must be automatically reinvested back into the portfolio. 7. T he aggregate value of stocks that this portfolio trades is calculated at the end of each business day. A positive gain in the aggregate value of stocks that portfolio trades is translated into a percentage gain on investment. The gains on investment are summed up and paid into the client’s account at the end of the week. In cases where the aggregate value of stocks that portfolio trades at the end of the trading day is less than at the beginning, a profit in the amount of the total decline in that value is added to the gains to be paid at the end of the week. The amount of profit paid on short-position trading gains cannot exceed 0.8% per day. 8. P rofits are not accrued for days when stock market trading is disrupted due to public holidays in market’s jurisdiction or unforeseen events. At times, portfolio managers can interrupt trading operations when markets are extremely volatile and managers decide that further involvement will carry with it an unnecessary amount of risk. 9. T his portfolio is available to persons aged 18 years or over and Corporate and Trust clients. 10. If you reside, or move to a jurisdiction in which MWF Financial Limited is not properly licensed or authorized, MWF Financial Limited reserves the right to refuse your deposit or decline to open an account or close your account with a 180 calendar day prior notice.
Portfolio
Mutual Wealth Growth and Income Portfolio
Inception date
12 May 2010
Issuer
MWF Financial Limited
Currency
US Dollar
Minimum deposit
USD 100
Minimum guaranteed earnings Capital withdrawal restriction
3% per week 180 calendar days
Early withdrawal penalty 60% of withdrawal amount Reinvestment requirement Reinvestment options
50%
Minimum 50% reinvestment, optional 100%
Charges
Subject to management fees published in this brochure.
Returns
HFT on long and short positions. 100% participation.
Capital guarantee
100% capital guarantee if no withdrawals requested before 180 calendar days from initial or additional deposit.
11. This portfolio is not available to persons residing in Cuba, Sudan, Syria, North Korea, Cyprus (Greece), Hong Kong SAR, Liberia and Myanmar. 12. MWF Financial Limited shall inform you of changes to the contents of this brochure and the company website that may affect the terms and conditions of your investment. 13. F leet Mutual Wealth Limited and MWF Financial Limited have the right to refuse any new account applications and/or deposits from clients.
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Fleet Mutual Wealth Limited Wheelock House | 20 Pedder Street Central | Hong Kong Tel. 852-3-9733868 | Fax. 852-3-0159056 Web. www.mutualwealth.com E-mail. info@mutualwealth.com