In it’s capacity of licensed investment intermediary, BBG SIMEX – BULGARIA offers to its customers the asset management service.
Using this service the investor gives a certain amount of money for management and the decisions in what kind of financial instruments the money should be invested in are taken by the investment intermediary.
This service is suitable for investors who wish to have higher income of their personal savings, but do not have the needed time or qualification. In this case they address the professional services of financial specialists.
According to article 54 from the Law on Public Offering of Securities only the licensed investment intermediaries are the people who can exercise this activity.
All investing conditions are contracted in accordance with the investor’s needs, desired profitability, propensity to take risks, investment possibilities and experience, personal preferences etc. In this way the type of investment portfolio is defined and the investment intermediary is managing it by his own judgment.
There are three main investment portfolio types:
Low-risk portfolio the given money resources are invested in almost no-risk assets, which naturally yield lower profitableness;
Intermediate risk (balanced) portfolio – it is a combination of investments in low and high risk assets. The possible return is greater but the loss risk is also greater;
High-risk portfolio in this case both profits and losses can be considerable.
It is important to note that the money resources, taken in for management, are kept in a separate bank (client) account.
This is commanded by the Law on public offering of securities. As a result of this order, the client’s money resources are separated from the investment intermediary’s own funds and are available in any moment under the form of money or financial instruments.
The investor can always withdraw the amount given for management within the range of the contracted term which can vary between two and five working days depending on the type of investments made.
A point of negotiation is also the investment intermediary’s fee, which can be defined in the following ways:
Fixed percentage of the Asset’s value by the end of each accounting period (month, quarter, year). In this case the remuneration is defined in the range of 1 to 3% yearly;
Percentage of the profit by the end of each accounting period. In this case the remuneration varies around 10% realized accounting period profit.
You shouldn’t forget that when investing in securities both the profit and loss possibilities are great and the risk is entirely at the investor’s expense.
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