Investment management provides a variety of tools for wealthy investors
Today investors have practically unlimited money-making opportunities and investment tools at their disposal. Investing in equities, bonds, precious metals, foreign currencies, commodities – all these options can generate income. However, to be able to trade foreign stocks, residents of Belarus will have to go through several procedures. Banks offer investment management service that makes this process easier.
Threshold of $10,000
In Belarus, investment management services are provided by large banks such as Alfa-bank, Bank BELVEB, Belagroprombank, Belarusbank, Belgazprombank, Bps-sberbank, and Priorbank. These services are available to individuals, legal entities and self-employed businessmen, both residents and non-residents of the Republic of Belarus.
Investment management services are designed to help a client make smart investment decisions on the stock markets in Belarus and abroad: stocks of corporate issuers, mutual funds, eurobonds, government securities and corporate bonds, derivatives (futures contracts, options), deposits and so on.
A customer entrusts a bank with managing his money, and the bank invests it in various financial instruments. How does this work in practice?
“Banking investment management professionals give consultations on these services, develop tailored strategies to meet the requirements of every client, and draft an investment management agreement,” Belagroprombank said.
The next step is the construction of an investment portfolio that can include from 4 to 15 different instruments. At the discretion of the client, the investment portfolio can be adjusted depending on the market situation.
Investment management means investing for the long term, and it requires patience. The minimum investment period is one year, while a term of three years and more is generally advised.
The money that customers give to the bank is clearly not the last cent in their pocket. Investment management services are available for sums starting from $10,000. But on average, according to the banks, the amount ranges from $30,000 to $60,000. Sometimes it reaches a million.
The bank charges a fixed amount at an annual rate of 1-2% of the amount invested. If the returns on the investment are good, the manager can expect a percentage on the profits. This motivates the manager to find the best investment solutions for his client.
Theoretically speaking, investors may trade foreign stocks on their own, without resorting to the services of a bank. However, they will need to get permission from the National Bank to purchase stocks, open a bank account for safekeeping in foreign depositories, find a broker, monitor the situation on the market and so on. This will require a great amount of time and money. Investment management services are designed to help investors solve this problem.
“First, it is safer to work through banks than by yourself. Second, the transactions are carried out from the general account of the investment manager, and brokers often charge the investor only a minimum commission,” Alfa-bank said.
In addition, the bank acts as a tax agent for individuals. It is responsible for calculating and paying all taxes on income from investments in foreign stocks, which is quite convenient for customers.
It is commonly believed that the Belarusians are conservative and cautious people. This reflects in the investment strategies they choose. Most banks offer three types of strategies: moderate, conservative and aggressive.
“The moderate investment strategy is chosen most often.