Mutual Fund Expat Global Bonds– with an annual yield of +4.23%

01.07.2020

+4.23% is the net annual yield of Mutual Fund Expat Global Bonds since it was founded in 2009. For the past year (2019) the fund has earned an yield of +6.24%.

Expat Global Bonds is a conservative, actively managed mutual fund that offers investors a diversified portfolio of liquid bonds (government, corporate, and bank bonds), mainly investment grade, of issuers worldwide. The fund aims to provide exposure to an asset class which is normally difficult to access for non-professional mass investors.

Expat Global Bonds aims to offer better return than bank deposits do, with one major advantage – investments in the fund are fully liquid. Prices per unit are traded in BGN, but the fund is not related to any currency risk with respect to the Bulgarian currency, as it consists in instruments traded in USD and EUR.

Advantages for Investors

  • Stable historical growth in the fund’s price
  • Low volatility
  • Immediate liquidity
  • No tax on capital gains in Bulgaria
  • High level of diversification regarding regions, states, and sectors
  • Low investment threshold – BGN 100
  • Active and professional portfolio management
  • Reporting and regulation

Additional information on the portfolio and the fund’s prospect, as well as the full set of documents, could be found here.

What is a bond?

Bonds are debt securities issued by a corporation (corporate bonds) or a government (government bonds). The bond issuer pays a predetermined interest periodically (i.e. on every 6 or 12 months) and is obliged to fully repay the debt at maturity. Bonds are traded on exchanges as many other securities. Their price varies according to the demand and supply in the market. Bond investors earn from several components:

  1. Annual yield from coupons

The investor receives an annual yield in the form of coupon payments. Coupons are usually paid once a year or in parts – every 6 months or every 3 months. Unlike deposits, the early withdrawal of which means losing the interest, bonds are a different story. In any moment that the investor decides to sell, they receive the accumulated interest up to the date – i.e. yield from coupons is preserved.

 

  1. Rise in market price

Bonds are traded on an exchange, similarly to other securities. Their price varies daily, although it does so more slowly compared to higher risk and more volatile instruments such as equities. The investor may decide to hold the bond until maturity, when the bond will be repaid in nominal value, or may sell the bond earlier – at a rise in the bond’s market price – and thus would realize a capital gain.

Investing in Expat Global Bonds

Expat Global Bonds is an open-ended UCITS-compliant mutual fund with quotes twice per. Investors buy and sell units of the fund according to the day price per share (NAV per share). This price is calculated based on the assets’ value up to the moment and is then published on the website of the managing company. When the instruments in the fund’s portfolio increase in value, the fund’s value increases accordingly, as well as the value of the individual investment.

In practice, each investor that holds units from the mutual fund, receives a proportional share of the whole fund portfolio. This way, even with small amounts, the investor achieves good diversification and exposure to a wide array of instruments, subject to smaller transaction costs and zero taxes.

Management Fees of Expat Global Bonds    
 

Up to BGN 500 000

Over BGN 500 000
Purchase taxes 1.00% 0.50%
  Up to 24 months Over 24 months
Redemption taxes 1.00% 0.00%
Fixed annual yield (% of NAV)   0.9%
Floating remuneration for the achieved profitability, calculated on the positive margin between the Net Asset Value for the day and the highest NAV up to that point, achieved during the same calendar year.    

More about Expat Asset Management Mutual Funds here.

 

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This document has only information purposes, and any part of it shall not be interpreted as any kind of offer or invitation to buy or sell financial instruments and/or professional advice related to an investment decision. All the necessary measures have been taken in order to guarantee the preciseness of the provided content, yet under no circumstances will Expat Capital and Expat Asset Management take responsibility with regard to it, nor will they take care of any damages with respect to recipients or any third parties so as to the preciseness, completeness, and/or the correctness of any information included in the document.

Expat Asset Management provides the opportunity to any interested party to become familiar with the current prospects, documents with key information for investors, and financial reports of the mutual funds in Bulgarian language on the company’s website www.expat.bg, in the company’s office (Sofia, Ul. G. S. Rakovski 96A) every weekday 9 am – 6 pm, as well as on any desk that receives buy and redemption orders for shares of the funds.

Investors shall bear in mind that forecasts are not a certain indicator for future profitability. Past results do not guarantee future results, and investment values may rise or fall, leading to considerable losses. No profit is guaranteed and a there is always a risk not to be able to restore the initial amount invested. Investments in mutual fund shares or through an individual investment account are not guaranteed by any state guarantee fund or any other type of guarantee.