We believe the classic approach to building a conservative, diversified portfolio with only stocks and bonds could be problematic for the medium term investment horizon.
Since the year 2000, a portfolio heavily weighted toward fixed income with some equities provided a reasonably good overall return, albeit with some volatility. This has largely been driven by loose monetary policy of Central Banks which have pushed interest rates to zero. The equity portion of the portfolio has offered good returns for the same reason.
However, we do not expect bonds to have value going forward as evidenced by the following few examples:
German Bunds
are either yielding negative rates (up to 5 years now) or only slightly positive in the longer part of the curve (0.70 % at 10 year horizon as of June 2015).
Spanish bonds
yield a very low rate of return as well (2% for 10 year bond as of June 2015).
Sub-investment grade bonds
are trading at close to all-time low yields, currently below 5% for BB rated bonds. Even CCC bonds are trading below 10%. These low yields do not compensate an investor for the potential default risk.
Given the extremely low yields and spreads currently available to bond investors, we cannot see the value in allocating a significant part of any portfolio to the bonds at the current moment.
What is the solution? We see two possibilities:
Wait
This means cashing out the current bond positions and simply waiting for the rise in bond yields. However, this could be a long wait as bond yields are likely to remain low for a long time and this would offer zero return. Continuing to hold bonds while rates are rising is also not an option since the portfolio will experience mark-to-market losses. Bond holders are faced with a dilemma of holding assets with very little upside but with a lot of downside or holding cash with zero return. Stocks should probably remain a portion of the portfolio mix but the indices show that on various valuation measures stocks are getting expensive.
Individual stocks and individual stock markets may outperform the broader indices but for these cases you have to have good managers or expertise to pick the stocks and/or markets. Stocks also bear tremendous risk in any market correction and in rising interest rate environments.
Invest with Sirius
We believe the addition of the Sirius Reserva strategy to a conservative portfolio will either add yield without increasing risk or reduce risk without hurting yield, or both – in other words, we do not suggest to put 100% of the portfolio into the Sirius Reserva strategy but are confident that the addition of the strategy will improve the performance of any portfolio. Our portfolio is not a black box but real assets with real returns that have been made possible by legislative and/or technological changes on the financial markets. It also offers the possibility to mimic the way ultra-high-net-worth individuals and families have been investing for years.
Invest with Sirius
We provide you with a carefully selected portfolio of alternative assets which until now were only available to ultra-high-net worth individuals and family offices.
We provide a portfolio of assets with low correlation with the financial markets that are managed by the best of breed fund managers throughout the globe.
We provide an alignment of interests with the management of Sirius investments, since the management invests a significant portion of their wealth in the fund.
Sirius Investments is an asset manager which:
We believe,
that the same strategies that worked to generate reasonable return in the past will not work in the coming years. Therefore investors must develop alternative approaches to generating returns.
We know,
that there are many alternatives to the main financial assets of stocks and bonds and that the traditional approach of private banks does not offer clients much choice when it comes to these assets.
We are
more flexible and personal than the typical private bank. Which private banker invests into the same portfolio that he proposes to you?
Why invest with Sirius Investments?
Because
Old investment approaches have stopped working in the zero interest rate environment.
Because
There are and will be bubbles forming in financial markets once again that one should try to avoid.
Because
We have a strategy which not only offers a higher return but a more stable one compared with the traditional conservative market investments.
Because
Our team has asset management experience not only on the Czech market but in international financial centers of London, Vienna, and Frankfurt.
Sirius Investments Reserva is the first sub-fund of Sirius Investments SICAV. This sub-fund offers investors unique set of parameters:
Target returns are above bank account interest rates and government bond yields
The current target return is 5%.
High Liquidity
Valuations of the portfolio are calculated monthly at the end of each calendar month. Investors can invest on a monthly basis and redeem the shares with 90 days notice.
Wide Diversification
The portfolio is allocated among different alternative asset strategies with each strategy allocated to a number of different funds; each fund is then diversified further (holding thousands of P2P loans, or hundreds of insurance contracts). This results in the overall exposure of the Reserva sub-fund to any one loan, receivable, insurance contract etc., to be no more than a few tenths of one percent of the overall portfolio.
Low Correlation to Financial Markets
The type of alternative investments in the portfolio do not rely on financial market movements for their returns and thus have a lower possibility to suffer losses in down markets.
Hedge to Czech Koruna
The fund hedges the portfolio to Czech Koruna.
Monthly Returns of Sirius Investments Reserva
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Basic characteristics
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For Investors
In this section we have provided more information
regarding Sirius Investments SICAV.
The Czech National Bank is the regulatory authority for investment funds in the Czech Republic and has granted a license to Sirius Investments, SICAV on April 30, 2015.
Administrator
QI investiční společnost, a.s. is the largest non-bank asset administrator in the Czech Republic and represents several hundred investment funds (both foreign and domestic) on the Czech market. The main function of the administrator is the correct calculation of the net asset value (NAV) of the fund.
Depository
Ceska Sporitelna, a.s. is the depository for the fund where it fulfills its statutory safekeeping and limit controlling functions. Ceska Sporitelna is one of the largest Czech banks and is a subsidiary of Erste Group, Vienna.
Shareholding Registrar
QI investiční společnost, a.s. is the largest non-bank asset administrator in the Czech Republic and represents several hundred investment funds (both foreign and domestic) on the Czech market. The main function of the Shareholding Registrar is to handle inflows to and redemptions from the fund and to keep record of all the shareholdings in the fund.
Important Notice
The securities mentioned here are for Qualified Investors only where Qualified Investors is a person whose initial investment in this fund is at least EUR 125 000 and who has made a declaration that he/she is aware of the risks associated with investing in funds for qualified investors. (Act No.240/2013 Coll. on Investment Companies and Investment Funds)
The content of this website is intended for informational purposes only and exploration of potential interest for qualified investors. It provides only a brief overview of the structure of the fund and does not substitute for its statute. All parameters listed and all investment ideas are only indicative. The content of this website does not replace expert advice on financial instruments or complete information about risks.
This is not an offer or invitation to buy or sell financial instruments. Return or yield on an investment in the fund is not secured nor guaranteed. For further information contact the info@siriusinvestments.cz.
Mgr. Martin Burda, MBA
Chairman of the board
Martin has built a 20 year career in the area of asset management. Before founding Sirius Investments, he was the CEO for the largest Czech asset manager, the Investment Company of Ceska Sporitelna (ISCS). Before that, Martin was the Chief Investment Officer of the asset management arm of ING Group in the Czech Republic. In 2014, Martin founded the “Czech Farmland Fund” the first fund in the Czech Republic focused on the alternative asset class of farmland.
John has more than 25 years in international investment experience. Prior to joining Sirius Investments as the Chief Investment Officer, John worked for several Prague-based wealthy families on their alternative investment strategies and consulted with them on corporate finance. Before that, John was a founding partner in the London-based hedge fund MT Thaler for 7 years. Previously, John headed the Central and Eastern European fixed income desk for Commerzbank and the bond and equity trading desks for ING Prague. John has received an investment management certificate from the UK regulatory authority and is a member of the CFA Society.
Martin has 8 years of experience as a financial market analyst; for the last several years he was the Head of Financial Market analysis for Ceska Sporitelna group. The team Martin led was responsible for recommendations to the traders of the Ceska Sporitelna and for the Portfolio Managers of the ISCS. Also, his work was used as a basis of strategic decisions made within Erste Bank Group, the parent company of Ceska Sporitelna.
Tomas has more than 17 years banking and asset management experience, including Partner at the independent asset management firm Rhine Capital Partners, in Zurich. Previously Tomas had managerial functions at ING Bank and PWC in the area of Corporate Finance and M&A. He started his career in such institutions as KPMG and Deloitte on the financial institutions’ desk and has worked in London and Zurich.
Radim has more than 10 years of experience working for financial institutions, including most recently as Sales Director for Saxo Bank for Central and Eastern Europe where he was active on financial markets. Previously, Radim worked for several major insurance companies. He has also analyzed the secondary life insurance market. Radim has also worked in London and has studied at the London School of Economics.
Sylva has worked for the last 15 years in a financial advisory firm working with private clients investing in international markets & providing excellent customer service.
