Fund Management

Fund management is the process of managing a pool of money, often called a fund, on behalf of investors. The goal of fund management is to achieve a specific investment objective, such as capital appreciation, income generation, or risk mitigation. Fund management can be done through various investment vehicles, including mutual funds, exchange-traded funds (ETFs), hedge funds, and private equity funds.

The Fund Management Process

The fund management process typically involves several stages, including:

Investment Policy: The investment policy sets out the fund’s investment objectives, risk tolerance, and investment restrictions. The investment policy is typically developed by the fund manager in consultation with the fund’s trustees or directors.
Asset Allocation: Asset allocation involves determining the percentage of the fund’s assets to invest in various asset classes, such as equities, fixed income, and alternative investments. The asset allocation decision is based on the fund’s investment policy, risk tolerance, and market conditions.
Investment Selection: Investment selection involves choosing specific investments that fit within the fund’s asset allocation and investment restrictions. The investment selection process involves researching potential investments, analyzing their financial and economic fundamentals, and evaluating their potential risks and rewards.
Portfolio Management: Portfolio management involves actively managing the fund’s investments to achieve the fund’s investment objectives. Portfolio management includes monitoring the performance of the fund’s investments, making investment decisions, and rebalancing the portfolio as necessary.
Risk Management: Risk management involves identifying and mitigating potential risks that could impact the fund’s investments. Risk management includes diversifying the fund’s investments, monitoring market trends and events, and implementing risk mitigation strategies.
Reporting and Communication: Reporting and communication involve providing regular updates to investors on the fund’s performance, investment decisions, and market trends. Reporting and communication also include responding to investor inquiries and addressing any concerns or issues that may arise.

The Role of the Fund Manager

The fund manager plays a critical role in the fund management process. The fund manager is responsible for developing the investment policy, selecting investments, and managing the portfolio. The fund manager is also responsible for implementing risk management strategies, monitoring market trends and events, and providing regular updates to investors.

The fund manager’s performance is measured by the fund’s investment returns, risk-adjusted returns, and adherence to the investment policy and restrictions. The fund manager’s compensation is typically tied to the fund’s performance, with fees based on a percentage of the fund’s assets under management.

Regulatory Oversight

Fund management is typically regulated by financial authorities, such as the Securities and Exchange Commission (SEC) in the United States. The regulatory oversight is designed to protect investors by ensuring that funds adhere to investment guidelines, provide transparent and accurate information, and operate in a fair and ethical manner.

Conclusion

Fund management is a complex and dynamic process that involves managing a pool of money on behalf of investors. The fund management process includes developing the investment policy, asset allocation, investment selection, portfolio management, risk management, reporting, and communication. The fund manager plays a critical role in the fund management process, and regulatory oversight is designed to protect investors by ensuring that funds operate in a fair and ethical manner. Fund management is an important part of the financial industry, providing investors with access to a diverse range of investment opportunities and helping to drive economic growth and development.

Gain insights and access to the global markets with a focus.

November 1, 2022March 13, 2023

Singapore Variable Capital Company VCC

Transforming a small sovereign country in Asia into a financial powerhouse

The Singaporean Variable Capital Company Act, or VCC Act, is one of the most significant developments in Asian finance to occur in recent years. Administered by the Accounting and Corporate Regulatory Authority of Singapore (ACRA), this legislation opens an entirely new world for foreign and domestic funds seeking to incorporate Asian investment instruments into their portfolios.

Offering a highly flexible fund structure, the VCC is poised to solidify Singapore’s position as the de facto financial and investment capital of Asia. First piloted in 2019 with the inclusion of 18 fund managers, the VCC Act officially went live on January 15th, 2020. Launching or redomiciling a VCC in Singapore is a straightforward process that is doable via the ACRA website. To ease the financial burden of registration, the Monetary Authority of Singapore (MAS) has launched a Variable Capital Companies Grand Scheme program.
This program will co-fund up to 70% of incorporation or registering expenses, so long as they are paid to a Singapore-based service provider.

One of the most attractive benefits of using the VCC structure is the ability to issue a fund as a stand-alone entity or an umbrella entity. The former is comprised of a single investment portfolio and is a relatively traditional format for a fund. A VCC umbrella fund is much more dynamic and allows investors to issue various segregated sub-funds, all held under the same umbrella investment fund. Part 4, Subsection 29 of the VCC Act, is one of the essential sections of the Act that touches on umbrella funds.

This section states that the segregation of sub-funds means that the liabilities are self-contained to each specific sub-fund. If one sub-fund goes under, the other sub-funds within the same umbrella fund are not affected.

Both open and closed funds are available for registration under the new VCC Act. Open-ended funds can issue an unlimited number of shares, which are generally priced daily based on the fund’s net asset value (NAV). Open-ended funds are usually more liquid and hold diversified portfolios. Close-ended funds raise a fixed amount of capital and publicly trade on secondary markets. This fund style generally entails higher yields than their open-ended counterparts and are priced more frequently than once per day. Each of these fund styles has relative pros and cons, and Singapore’s VCC Act allows investors exposure to both types.

The United States represents a significant portion of the investment world. With portfolios becoming increasingly globalized, any legal framework is well-advised to consider how to incorporate US investors with relative ease. Bringing previously off-shore capital into on-shore funds is often best accomplished using the “check the box” rules associated with IRS Form 8832. These rules allow entities to be treated by the US as “pass-through” entities, offering US investors an enticing level of inclusion. While the legislation is still young, Singapore’s VCC Act allows US investors to take advantage of this attractive election opportunity.

Investors may wish to make the permanent move and redomicile in Singapore, given its emerging status as the de facto entry point to Asian financial markets. If a company is already doing business in Singapore, redomiciling allows for complete business continuity and confers many tax benefits. It is important to note that redomiciling in Singapore is irrevocable as there are currently no provisions for entities incorporated in Singapore to redomicile overseas.

While this means redomiciling is a permanent decision, the VCC Act demonstrates that the city state’s financial environment is further liberalizing, conferring both business and legal benefits for any entities that decide to redomicile in Singapore.

If a company is already doing business in Singapore, redomiciling allows for complete business continuity confers many tax benefits.

The subject of taxation naturally entails bilateral and multilateral trade agreements, of which Singapore has many. Singapore beats out most other nations in terms of tax treaties with 86 in its jurisdiction. This amount compares to 83 tax treaties in Luxembourg, 74 in Ireland, and 37 in Hong Kong. Any potential investor must consider the tax treaty benefits conferred by incorporating or redomiciling in Singapore as a second-order benefit. The OECD’s Base Erosion of Profit Shifting (BEPS) initiative focuses on eradicating predatory tax rate shopping by international corporations, and Singapore is a dedicated signer of this initiative. Notwithstanding this further demonstrates the veracity of the VCC Act and Singapore’s earnest approach to confidently stepping up to the plate as the new financial doorway to Asia.

The VCC Act takes the best aspects of other tax havens’ financial frameworks and optimizes them Singapore’s unique situation. This Act comes at a near-perfect time as the city-state is poised to receive massive investment from off-shore funds seeking to redomicile as on-shore entities due to geopolitical uncertainties. Many considerations must be taken into account before a company decides to expand into a new legal jurisdiction.

However, with Singapore’s dedication to Common Law, near-perfect position in the Strait of Malacca, and increasing economic liberalization, one would be hard-pressed to find a better candidate for foreign investment.

November 1, 2022March 14, 2023

ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG)

A most promising area of growth is sustainable finance where singapore aspire to support Asia’s transition to a low carbon economy.

The task of reducing emissions is urgent, as pointed out by the most recent report of the United Nations Intergovernmental Panel on Climate Change.
All sectors of the economy need to achieve progressive and deep emission reductions.
Some US$2 trillion in infrastructure investments will be needed over the next decade to enable Southeast Asia’s transition towards sustainabilityBain & Company, Microsoft and Temasek, Southeast Asia’s Green Economy: Opportunities on the Road to Net Zero, 2021..

Developing strategies to build a comprehensive ecosystem for green and transition financing.

Aligning financing efforts with credible sectoral transition plans, that provide clarity about transition pathways and carbon emission targets. This in turn generates investor confidence and catalyses greater sustainable finance flows.
Promoting blended finance solutions, where targeted risk sharing by governments or multilateral development banks can crowd in private capital more effectively.
Stepping up efforts to enhance collection of emissions data, develop credible transition taxonomies, and implement consistent climate-related reporting and disclosure standards.
- One key initiative which MAS has embarked on with the industry is Project Greenprint, which comprises common utility platforms.
- These platforms will harness technology to address the financial sector’s sustainability data needs, and enable a more transparent, trusted and efficient ESG ecosystem that can catalyse green and sustainable finance.

One of the most encouraging aspects of the strong growth of the financial sector is the number of good jobs that are being created.

MAS estimates that there will be more than 9,400 new hiring opportunities for permanent roles in the financial sector in 2022MAS-IBF Employment Outlook Survey 2022..
More than 3,000 jobs will be in technology.
- Software developers and engineers continue to have the highest demand, with more than 700 opportunities.
- They support a wide range of exciting activities, such as designing and developing digital finance services; applying blockchain technology in trade finance; and using artificial intelligence to detect fraud and money laundering.
There will also be interesting new roles in sustainable finance.
- These range from execution of ESG transactions to advisory services and product development.
- Many of these jobs will draw on traditional finance expertise such as product structuring, risk management, reporting and pricing, but layered and infused with new knowledge on sustainability.

Climate change is a global existential challenge. Singapore, being a low-lying city state, is particularly vulnerable to the effects of climate change.

Singapore is fully committed to the global climate action, and will play its part as a responsible member of the international community.

In 2021, Singapore launched the Singapore Green Plan 2030 (“Green Plan”), a whole- of-nation movement to advance the national agenda on sustainable development. The Green Plan charts concrete targets over the next 10 years, strengthens Singapore’s commitments under the United Nations’ 2030 Sustainable Development Agenda and Paris Agreement, and positions us to achieve our long-term aspiration of net zero emissions.

The green transition will be a new engine for jobs creation and growth across the economy. This includes the greening of traditional sectors such as aviation, energy, and tourism, as well as the emergence of new sectors such as green finance, carbon services and low-carbon technologies. The Government will work in partnership with the private sector to provide an enabling environment for businesses and workers to take advantage of these new growth opportunities.

To support Singapore’s decarbonisation efforts and deepen Singapore’s green finance market, the Government announced at Budget 2022 that the public sector will take the lead by issuing up to S$35 billion of green bonds by 2030. This will include bonds issued by the Government as well as Statutory Boards.

These public sector green bond issuances will serve as reference for the corporate green bond market, deepen market liquidity for green bonds, and attract green issuers, capital, and investors. This paves the way for greater private sector green finance activity.

The Government has published a national Green Bond Framework (“Framework”), which lays the foundation for the issuance of green bonds by the Government under the Significant Infrastructure Government Loan Act 2021 (“SINGA”), and serves as a reference for Statutory Boards’ respective green bond frameworks.

Singapore Sovereign Green Bonds,
also known as Green Singapore Government Securities (“SGS”) (Infrastructure), will be used to finance major, long-term green infrastructure in Singapore that qualify under the Framework. Borrowing for such infrastructure spreads the costs across the generations that would benefit from these projects.

Examples of eligible green SINGA projects include the upcoming Cross Island Line and Jurong Region Line. Our rail network expansion will enhance connectivity and encourage more commuters to take mass public transport, which together with walking and cycling, are the greenest ways to move.

The Singapore Government will borrow prudently and adhere to stringent safeguards.

(a) In order to qualify for financing via Green SGS (Infrastructure), infrastructure projects will need to meet the high bar to qualify as nationally significant under SINGA, as well as the green eligibility criteria stated in the Framework.

(b) The issuance of such green bonds will be subject to the overall legislative gross borrowing limit and the annual effective interest cost limit under SINGA.

The gross borrowing limit of S$90 billion and annual effective interest cost threshold of S$5 billion apply to the overall SINGA programme, which comprises the issuance of both Green SGS (Infrastructure) and SGS (Infrastructure).

Overview of Singapore Government Borrowings Details on how Green SGS (Infrastructure) fits within the Singapore Government’s existing suite of borrowings.

Bonds & Bills – Monetary Authority of Singapore Details on Green SGS (Infrastructure) such as the issuance calendar, auction updates and bond return calculator.

July 3, 2020June 20, 2023

Digital Future

All businesses should started building toward a digital future. The transformation to a digital future is happening right now and faster than you realize, through the COVID-19 pandemic the importance of digital future has been demonstrated as we are forced to stay at home and has to fulfil all our daily needs plus working online.

Digital assets can be anything from a picture, videos to contents you created online. The shift to digital money is further prove that a digital future is inevitable and growing digital assets is something everyone need to start now. With the establishment of fin-tech companies that builds blockchain solutions for regulated financial institutions. Digital assets will soon be the future of finance.

Finally, upgrading towards a digital future can also provide new opportunities. Many industries are embracing digital technologies, and having digital edge can be a valuable asset. Whether you are looking to start your own business or seeking new employment opportunities, upgrading your digital foot print can significantly improve your prospects.

it’s time to take the plunge and upgrade towards a digital future.

Singapore has one of the most friendly business ecosystem and with an emphasis to grow as a technological hub, has attracted talents and funding from all around the world, the government strong support to create and test financial technology with MAS stringent financial regulation has made it the idea place to grow and start fin-tech companies.

Create Digital QR Code Namecard

Fill in information and generate your own digital namecard

July 3, 2020March 8, 2023

Flowing Times

With foreign direct investment, net inflows into Singapore at unprecedented records, what does it all mean to you?

The Foreign currency deposits at banks in Singapore rose by a record S$6 billion in April to the unprecedented high of S$27 billion.

A factor for the increase stems from the uncertainty in Hong Kong and the passing of the national security law. With the national security law passed, Taiwan will feel threatened to be the next focus of China. The political instability of the region will spark a series of events resulting in increasing inflow activity into Singapore.

Singapore ability to contain the spread of the pandemic has solidify it’s position as a secure wealth haven in Asia, backed by a strong regulatory and financial stability with the MAS. Singapore tactful foreign diplomatic stance and systematic governing and handling of the country will continue to prove to be a top choice for investors.

July 3, 2020March 8, 2023

Security First

Mother nature has always been ruthless, be it earthquakes, wild fires or floodings but what will not be forgotten will be the Covid 19 virus pandemic. This pandemic has brought markets to a new height of uncertainty almost to a breaking point.

The war between Russia and Ukraine caused much uncertainty throughout the world forcing even the powerful wealthy families at the top defenseless, scrambling to move to safer jurisdiction for fear of becoming the next collateral damage of the war. The seizing of assets of Russian no longer citizens of Russia has laid bare the tactic used by governments to capitalize on wars and struck a new kind of fear for all wealthy immigrants around the world that has left their mother country. With the rising cost of resources brought on by the war and the unstable economy with what is coming next, a recession is imminent and the strain of a flawed financial system breaking down is going to force many bankrupts.

China’s security law over the control HongKong has inevitably affect many coupled with the hard handed strong policy of China zero tolerance covid policy has pushed many to the edge as they relocate to a more secured jurisdiction, affecting not just HongKong or Taiwan but from China as well. With the current circumstances playing out Singapore stand out as a top favorite with its secure financial system and political stance.

Covid 19 pandemic had laid bare how each government fare in handling a crisis and there is much more to worry as the world economy heads into a recession amid the ongoing war between Russia and Ukraine and a technological one between the US and China. A government response to stabilizing their economy is key and will be one of the main check box for foreign future investment. While the road ahead looks dim at the least this will be a good reality check to know and go where that is safer.