Profit – Loss Sharing Scheme
"Profit-Loss Sharing Scheme" is a discretionary portfolio management service where IDLC Investments Ltd. will manage your fund and take all investment decisions. This is a specific structured product where IDLC Investments Ltd. will be a partner of your investment with limited sharing as much as 30%. So, the ratio of the total investment will be 70:30, where client will invest 70% and IDLC 30%.
- Minimum Investment Amount : Individual/Corporate : BDT 10 Lacs
- Minimum Investment Horizon : 2 (Two) Years
- Investment and Profit-Loss sharing : Under at 70:30 Ratio
Your Portfolio Manager will adopt a clear and transparent investment process in terms of portfolio composition, stock selection, trade execution, monitoring and rebalancing.
The investment process has been carefully designed to ensure:
- Independent professional judgment and responsibility in each area of decision making
- Elimination of all sorts of conflicts of interest
- Fair dealing and objectivity in every transaction
- Compliance of law and other fiduciary duties
We adopt a Top-Down Approach to determine appropriate sector allocation and security selection to build your portfolio. We use both fundamental and quantitative analysis for managing the investments.
Your Portfolio Manager will focus on achieving long term returns at a reasonable risk through active management of your portfolio.
Where to Invest?
Your Portfolio Manager will invest only in capital market securities (both debt and equity) approved by the Securities and Exchange Commission and/or Bangladesh Bank. In order to protect the capital and increase the profit potential, funds may be invested, as a defense strategy, in quoted/unquoted debt securities, depository instruments, or fixed deposit accounts.
Your portfolio manager will abide by the following restrictions while making investment decisions:
- Funds will not be invested in securities having lock in period of more than 1 year.
- Funds will not be invested in private venture capital.
- Funds amounting to more than 30% of your total assets will not be invested in unlisted equity/debt securities, including IPO and pre-IPO private placements.
- Funds amounting to more than 30% and 60% of total assets will not be allocated in a single security and single industry respectively.
Prospective investors of DPM should appreciate that portfolio investment in capital market is subject to certain risk factors, as detailed below, which are not necessarily exhaustive or mutually exclusive:
- Portfolio return is significantly dependent on the macro economic situation and the capital market in particular.
- Lack of liquidity and extreme price volatility may significantly impact portfolio performance. Due to lack of adequate number of securities, the portfolio may not be optimally diversified. Moreover, strong positive correlation among the equity securities also greatly limits the diversification benefits.
- Appropriate balancing between different asset classes may not be achieved due to absence of an active debt market.
- Despite careful selection of stocks, the companies may fail to provide expected dividend or make timely disbursements.
- The value of the portfolio assets may be affected by uncertainties such as political or social instability, adverse climatic condition, and change in any law or regulations of the territory etc. Such risk exposure may limit your portfolio’s ability to achieve its stated return objective, and may result in substantial loss.
Who Will Bear the Risk?
As a client of "Profit-Loss Sharing Scheme" both profit and risk will be shared proportionately according to partnership investment ratio @70:30 where any profit or loss occurred in the portfolio, IDLC Investment Limited will take 30% responsibility of the total portfolio.
Net Gain Distribution Policy
Net Gain Distribution Policy for “Profit-Loss Sharing Scheme” is that a minimum 50% of the realized gain (if any) will be distributed to the account holders proportionally (70:30) at the end of each calendar year and rest of the amount will be reinvested.
Risk Control Measures
To control volatile portfolio performance, your Portfolio Manager will judiciously apply various risk control measures. The primary paradigm of risk control has been described below:
- First, the Portfolio Manager will set appropriate limits on downside shortfall in securities, industry and portfolio levels.
- Second, the Portfolio Manager will try to minimize risk by selecting fundamental and potential securities and achieving adequate diversification.
- Finally and most importantly, the Portfolio Manager will continuously monitor the performance of your portfolio and the capital market conditions. Your portfolio will be actively balanced in line with the changed market scenario, if it is deemed prudent.
Semi-annually portfolio and transaction statements will be given.
Fees and Charges *
- Documentation Fee : BDT 500 (one off)
- Management Fee : 2.50% p.a. on the market value of the securities, charged quarterly
- Settlement Fee : 0.35% on the transaction value
- Early Exit Fee (within tenor) : 5% on the withdrawal/closing amount
- Annual CDBL account renewal fees: BDT 500
* Subject to change
Please refer to Forms and Documents for Investment to download forms.
To know more about DPM products and services, please contact us at email@example.com or call us at 16409, +8809609994352.