Why Invest In The Fund

The Active Banking Fund is a low risk equity fund suitable for investors looking for consistent returns above the risk-free rate with low volatility. The Fund’s objective is capital growth without excessive risk by investing in blue-chip banks with a market capitalisation of at least $10bn. The Fund avoids very small capitalisation banks which are inherently higher risk and less transparent. The Fund leverages the fund manager’s extensive expertise in the banking sector and has a very robust risk management process which is being implemented via strict internal limits and controls. The Fund’s board is responsible for setting the Fund’s overall investment strategy and risk management and ensuring adherence to these.

The Fund has various attractive features:

• Low charges vs market norms
  •  Annual investment management fee of 1% vs a market average of 1.5%-2.0%
  • A performance fee of 15% vs a market norm of 20% (for actively managed funds)
    
• Monthly subscriptions and redemptions
• No entry or exit fees

The Fund is a very attractive investment proposition in the current global investment landscape:

• It provides exposure to the most solid banks in the USA, Canada and Western Europe.
• It is invested in some of the world’s most profitable and well run banks with dividend yields of 2.5%-3.5%.
• US banks profits are expected to get a boost from additional Federal Reserve interest rate hikes later this year and in 2018. 
• European banks are finally becoming an attractive investment proposition after many years of underperformance as Eurozone political uncertainty is subsiding and Eurozone economic indicators are starting to improve.
• Financial stocks is currently a relatively cheap sector in terms of Price/Earnings and Price/Book ratios and very cheap compared to the sector’s historic valuation multiples (pre-2008 financial crisis).
• Interest rates in the Eurozone are expected to remain zero/negative until 2018; bank deposit rates will continue to remain very low which makes investments in low risk equity funds quite attractive.
• Eurozone banks bail-in legislation means ongoing risks for bank depositors; very low deposit rates do not capture the risk-premium of depositing money with weak peripheral banks in the Eurozone.