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Introduction to investment managment

Investment management is the professional asset management of various securities (shares,

bonds and other securities) and other assets (e.g., real estate) in order to meet specified
investment goals for the benefit of the investors. Investors may be institutions (insurance
companies, pension funds, corporations, charities, educational establishments etc.) or private
investors (both directly via investment contracts and more commonly via collective investment
schemes e.g. mutual funds or exchange-traded funds).
The term asset management is often used to refer to the investment management of collective
investments, while the more generic fund management may refer to all forms of institutional
investment as well as investment management for private investors. Investment managers who
specialize in advisory or discretionary management on behalf of (normally wealthy) private
investors may often refer to their services as money management or portfolio management often
within the context of so-called "private banking".
The provision of investment management services includes elements of financial statement
analysis, asset selection, stock selection, plan implementation and ongoing monitoring of
investments. Coming under the remit of financial services many of the world's largest companies
are at least in part investment managers and employ millions of staff.
Fund manager (or investment advisor in the United States) refers to both a firm that provides
investment management services and an individual who directs fund management decisions.
According to a Boston Consulting Group study, the assets managed professionally for fees
reached an all-time high of US$62.4 trillion in 2012, after remaining flat-lined since
Furthermore, these industry assets under management were expected to reach US$70.2
trillion at the end of 2013 as per a Cerulli Associates estimate.
The global investment management industry is highly concentrated in nature, in a universe of
about 70,000 funds roughly 99.7% of the US fund flows in 2012 went into just 185 funds.
Additionally, a majority of fund managers report that more than 50% of their inflows go to just
three funds.
Investment Management (Overview)

The Investment Management (IM) component provides functions to support the
planning, investment, and financing processes for:
Capital investments, such as the acquisition of fixed assets as the result of-house production
or purchase
Investments in research and development
Projects that fall primarily under overhead, such as continuing education of employees or
establishing new markets
Maintenance programs
The term investment, therefore, is not limited only to investments you capitalize for bookkeeping
or tax purposes. An investment in this context can be any measure that initially causes costs, and
that may only generate revenue or provide other benefits after a certain time period has elapsed
(for example, plant maintenance projects).

The IM component contains functions for managing investments in the area of
fixed assets. Financial assets are managed in the Treasury component.
Implementation considerations
For information on implementing the IM component, refer to the Implementation Guide (IMG)
for Investment Management. Choose SAP Customizing Implementation Guide Investment
The investment program and the appropriation request are objects that originate in the IM
component. In order to represent the measure, the IM component uses internal orders from
Overhead Cost Controlling - Overhead Orders (CO-OM-OPA) and Plant Maintenance (PM), as
well as work breakdown structure (WBS) elements from the Project System (PS).
The integration with Asset Accounting (FI-AA) enables you to easily capitalize the costs of
internal orders and WBS elements that require capitalization to a fixed asset. Costs that do not
require capitalization can be settled to cost accounting.
You can post acquisitions to a measure in the Logistics components of the SAP System.

Sub-Components of Investment Management and their Integration
The integrated planning process allows you to roll up planned values from appropriation requests
and measures on the investment program to which they are assigned. You carry out budgeting of
measures, on the other hand, from the top down within the investment program.
You can transfer expected depreciation on all planned investments to management accounting in
the form of planned costs.
Investment Management consists of the following components:
Component Used for
cyclical planning and management of investment budgets for a
number of measures, throughout your whole enterprise
management of the planning and approval phase of investments
and other types of measures
parallel handling of cost accounting and financial accounting
needs for individual investments. Measures take the form of
internal orders, projects and maintenance orders.
Investment Programs

You can use investment programs as a supplement for any planning for individual measures and
for budgeting in the following areas:
Monitoring of a global budget
Investment programs support the annual creation of an investment plan and budget if these are to
be monitored globally.
You can obtain an overview of planning and budgeting processes in complex enterprise
structures for all investments and large projects of the group, while at the same time maintaining
strict budgetary control.
The Investment Programs component provides functions for planning and monitoring of
investment budgets encompassing many different measures, on a cyclical basis, of an entire
corporate group. You can benefit from the integration of this component with the Investment
Measures and Appropriation Requests components. Measures and appropriation requests can be
assigned to investment program positions. By rolling up their plan values in the investment
program, these measures and appropriation requests are integrated in the comprehensive
investment planning process. At the same time, you can budget and oversee the measures using
the investment program.
Comprehensive investment programs in the SAP System offer the advantage of their direct
integration with the individual measures (orders or WBS elements), in contrast to non-integrated
planning systems. By means of this integration, you are quickly made aware if your
comprehensive budget is overrun. You can also monitor expenses for both external acquisitions
as well as internal costs (activity allocation, overhead).
The Investment Programs component includes the following processes and functions:
Process/Function Areas Used
Structure of the Investment Program Investments listed in a hierarchy
Planning and Budgeting of
Investment Programs
- Bottom-up: Planning investments in an
investment program
- Top-down: Budget distribution
Fiscal Year Change Carrying forward a current investment program
into a new approval year

Structure of the Investment Program

The system displays the program structure in maintenance transactions in the form of a
horizontal tree diagram. You can assign investment measures and appropriation requests to the
investment program positions.
Creating the Program Structure and Program Positions
When you create or change the tree diagram, you can also directly define the corresponding
program positions and assign them to the desired position in the hierarchy using fast entry.
The system uniquely identifies each program position based on its:
Investment program name and approval year
Position ID that has a maximum of 24 characters

The maximum number of hierarchy levels is 99.
There are limitations on how complex the investment program can be, due
to performance considerations. Since performance is strongly dependent
on your system configuration, we can only offer a figure for orientation: If
your investment program has more than 10,000 positions, you should
contact your SAP consultant.
You can make organizational assignments for each program position (such as, assignment to a
company code, business area, plant, or cost center). When you create new program positions
below existing positions in the hierarchy, the system automatically copies the assignments and
the general data from the higher-level position to the new lower-level position you are creating.
However, if you later change the organizational assignment of a program position that has
subordinate positions in the hierarchy, the system does not automatically copy the changes to
these subordinate program positions.
There is a report you can use to check the consistency of the organizational units in investment
programs (refer to
Inheritance of Organizational Units).
Top Positions and Controlling Area
You have to assign the top positions of a program to a controlling area. The system then
automatically copies this controlling area to all subordinate positions. In this way, it is
guaranteed that a subtree of an investment program always belongs to a given controlling area.
The program positions that do not have any subordinate positions assigned to them in the
hierarchy are called end nodes The individual measures of the investment program can be
assigned to these end node positions. You can assign internal orders, maintenance orders and
WBS elements to investment programs as measures (refer to
Connection between Programs and Measures).
You can make one of the following specifications for an end node position:
The individual measures assigned to the end node can be budgeted separately, and the totals of
these budgets are compared with the budget for the program position only on a periodic basis
in reports. (TheBudget dist. overall indicator is not set.)
The individual measures assigned to the end node receive their budget directly from the
program position. (The Budget dist. overall indicator is set.) In this case, the subordinate
measures can receive their annual budget, in addition to their overall budget, by direct budget
distribution from the program position, if theBudget dist. annl. (budget distribution of annual
values) indicator is set in the program definition. A consistency check then guarantees that
only the amount of overall and annual budget available on the program position can be
distributed to its measures (refer to
Distributing the Budget from the Program Position to the Measures).
Deletion and Reassignment of Sub-Trees
Subtrees can be deleted only if their program positions do not have any budget or plan values.
When you reassign a subtree, the system automatically transfers its budget and plan values along
with it.

Industry scope[edit]
The business of investment has several facets, the employment of professional fund managers,
research (of individual assets and asset classes), dealing, settlement, marketing,internal auditing,
and the preparation of reports for clients. The largest financial fund managers are firms that
exhibit all the complexity their size demands. Apart from the people who bring in the money
(marketers) and the people who direct investment (the fund managers), there are compliance staff
(to ensure accord with legislative and regulatory constraints), internal auditors of various kinds
(to examine internal systems and controls), financial controllers (to account for the institutions'
own money and costs), computer experts, and "back office" employees (to track and record
transactions and fund valuations for up to thousands of clients per institution).
Key problems of running such businesses[edit]
Key problems include:
revenue is directly linked to market valuations, so a major fall in asset prices can cause a
precipitous decline in revenues relative to costs;
above-average fund performance is difficult to sustain, and clients may not be patient during
times of poor performance;
successful fund managers are expensive and may be headhunted by competitors;
above-average fund performance appears to be dependent on the unique skills of the fund
manager; however, clients are loath to stake their investments on the ability of a few
individuals- they would rather see firm-wide success, attributable to a single philosophy and
internal discipline;
analysts who generate above-average returns often become sufficiently wealthy that they
avoid corporate employment in favor of managing their personal portfolios.
Representing the owners of shares[edit]
Institutions often control huge shareholdings. In most cases they are acting as fiduciary agents
rather than principals (direct owners). The owners of shares theoretically have great power to
alter the companies via the voting rights the shares carry and the consequent ability to pressure
managements, and if necessary out-vote them at annual and other meetings.
In practice, the ultimate owners of shares often do not exercise the power they collectively hold
(because the owners are many, each with small holdings); financial institutions (as agents)
sometimes do. There is a general belief
[by whom?]
that shareholders in this case, the institutions
acting as agentscould and should exercise more active influence over the companies in which
they hold shares (e.g., to hold managers to account, to ensure Boards effective functioning). Such
action would add a pressure group to those (the regulators and the Board) overseeing
However there is the problem of how the institution should exercise this power. One way is for
the institution to decide, the other is for the institution to poll its beneficiaries. Assuming that the
institution polls, should it then: (i) Vote the entire holding as directed by the majority of votes
cast? (ii) Split the vote (where this is allowed) according to the proportions of the vote? (iii) Or
respect the abstainers and only vote the respondents' holdings?
The price signals generated by large active managers holding or not holding the stock may
contribute to management change. For example, this is the case when a large active manager
sells his position in a company, leading to (possibly) a decline in the stock price, but more
importantly a loss of confidence by the markets in the management of the company, thus
precipitating changes in the management team.
Some institutions have been more vocal and active in pursuing such matters; for instance, some
firms believe that there are investment advantages to accumulating substantial minority
shareholdings (i.e. 10% or more) and putting pressure on management to implement significant
changes in the business. In some cases, institutions with minority holdings work together to force
management change. Perhaps more frequent is the sustained pressure that large institutions bring
to bear on management teams through persuasive discourse and PR. On the other hand, some of
the largest investment managerssuch as BlackRock and Vanguardadvocate simply owning
every company, reducing the incentive to influence management teams. A reason for this last
strategy is that the investment manager prefers a closer, more open and honest relationship with a
company's management team than would exist if they exercised control; allowing them to make
a better investment decision.
The national context in which shareholder representation considerations are set is variable and
important. The USA is a litigious society and shareholders use the law as a lever to pressure
management teams. In Japan it is traditional for shareholders to be low in the 'pecking order,'
which often allows management and labor to ignore the rights of the ultimate owners. Whereas
US firms generally cater to shareholders, Japanese businesses generally exhibit
a stakeholder mentality, in which they seek consensus amongst all interested parties (against a
background of strong unions and labour legislation.
Size of the global fund management industry[edit]
Conventional assets under management of the global fund management industry increased by
10% in 2010, to $79.3 trillion. Pension assets accounted for $29.9 trillion of the total, with $24.7
trillion invested in mutual funds and $24.6 trillion in insurance funds. Together with alternative
assets (sovereign wealth funds, hedge funds, private equity funds and exchange traded funds)
and funds of wealthy individuals, assets of the global fund management industry totalled around
$117 trillion. Growth in 2010 followed a 14% increase in the previous year and was due both to
the recovery in equity markets during the year and an inflow of new funds.
The US remained by far the biggest source of funds, accounting for around a half of
conventional assets under management or some $36 trillion. The UK was the second largest
centre in the world and by far the largest in Europe with around 8% of the global total.

Philosophy, process and people[edit]
The 3-P's (Philosophy, Process and People) are often used to describe the reasons why the
manager is able to produce above average results.
Philosophy refers to the overarching beliefs of the investment organization. For example: (i)
Does the manager buy growth or value shares, or a combination of the two (and why)? (ii)
Do they believe in market timing (and on what evidence)? (iii) Do they rely on external
research or do they employ a team of researchers? It is helpful if any and all of such
fundamental beliefs are supported by proof-statements.
Process refers to the way in which the overall philosophy is implemented. For example: (i)
Which universe of assets is explored before particular assets are chosen as suitable
investments? (ii) How does the manager decide what to buy and when? (iii) How does the
manager decide what to sell and when? (iv) Who takes the decisions and are they taken by
committee? (v) What controls are in place to ensure that a rogue fund (one very different
from others and from what is intended) cannot arise?
People refers to the staff, especially the fund managers. The questions are, Who are they?
How are they selected? How old are they? Who reports to whom? How deep is the team (and
do all the members understand the philosophy and process they are supposed to be using)?
And most important of all, How long has the team been working together? This last question
is vital because whatever performance record was presented at the outset of the relationship
with the client may or may not relate to (have been produced by) a team that is still in place.
If the team has changed greatly (high staff turnover or changes to the team), then arguably
the performance record is completely unrelated to the existing team (of fund managers).
Investment managers and portfolio structures[edit]
At the heart of the investment management industry are the managers who invest and divest
client investments.
A certified company investment advisor should conduct an assessment of each client's individual
needs and risk profile. The advisor then recommends appropriate investments.
Asset allocation[edit]
The different asset class definitions are widely debated, but four common divisions
are stocks, bonds, real estate and commodities. The exercise of allocating funds among these
assets (and among individual securities within each asset class) is what investment management
firms are paid for. Asset classes exhibit different market dynamics, and different interaction
effects; thus, the allocation of money among asset classes will have a significant effect on the
performance of the fund. Some research suggests that allocation among asset classes has more
predictive power than the choice of individual holdings in determining portfolio return.
Arguably, the skill of a successful investment manager resides in constructing the asset
allocation, and separately the individual holdings, so as to outperform certain benchmarks (e.g.,
the peer group of competing funds, bond and stock indices).
Long-term returns[edit]
It is important to look at the evidence on the long-term returns to different assets, and to holding
period returns (the returns that accrue on average over different lengths of investment). For
example, over very long holding periods (e.g. 10+ years) in most countries, equities have
generated higher returns than bonds, and bonds have generated higher returns than cash.
According to financial theory, this is because equities are riskier (more volatile) than bonds
which are themselves more risky than cash.
Against the background of the asset allocation, fund managers consider the degree
of diversification that makes sense for a given client (given its risk preferences) and construct a
list of planned holdings accordingly. The list will indicate what percentage of the fund should be
invested in each particular stock or bond. The theory of portfolio diversification was originated
by Markowitz (and many others). Effective diversification requires management of the
correlation between the asset returns and the liability returns, issues internal to the portfolio
(individual holdings volatility), and cross-correlations between the returns.
Investment styles[edit]
There are a range of different styles of fund management that the institution can implement. For
example, growth, value, growth at a reasonable price (GARP), market neutral, small
capitalisation, indexed, etc. Each of these approaches has its distinctive features, adherents and,
in any particular financial environment, distinctive risk characteristics. For example, there is
evidence that growth styles (buying rapidly growing earnings) are especially effective when the
companies able to generate such growth are scarce; conversely, when such growth is plentiful,
then there is evidence that value styles tend to outperform the indices particularly successfully.
Performance measurement[edit]
Fund performance is often thought to be the acid test of fund management, and in the
institutional context, accurate measurement is a necessity. For that purpose, institutions measure
the performance of each fund (and usually for internal purposes components of each fund) under
their management, and performance is also measured by external firms that specialize in
performance measurement. The leading performance measurement firms (e.g. Frank Russell in
the USA or BI-SAM [1] in Europe) compile aggregate industry data, e.g., showing how funds in
general performed against given indices and peer groups over various time periods.
In a typical case (let us say an equity fund), then the calculation would be made (as far as the
client is concerned) every quarter and would show a percentage change compared with the prior
quarter (e.g., +4.6% total return in US dollars). This figure would be compared with other similar
funds managed within the institution (for purposes of monitoring internal controls), with
performance data for peer group funds, and with relevant indices (where available) or tailor-
made performance benchmarks where appropriate. The specialist performance measurement
firms calculate quartile and decile data and close attention would be paid to the (percentile)
ranking of any fund.
Generally speaking, it is probably appropriate for an investment firm to persuade its clients to
assess performance over longer periods (e.g., 3 to 5 years) to smooth out very short term
fluctuations in performance and the influence of the business cycle. This can be difficult
however and, industry wide, there is a serious preoccupation with short-term numbers and the
effect on the relationship with clients (and resultant business risks for the institutions).
An enduring problem is whether to measure before-tax or after-tax performance. After-tax
measurement represents the benefit to the investor, but investors' tax positions may vary. Before-
tax measurement can be misleading, especially in regimens that tax realised capital gains (and
not unrealised). It is thus possible that successful active managers (measured before tax) may
produce miserable after-tax results. One possible solution is to report the after-tax position of
some standard taxpayer.
Risk-adjusted performance measurement[edit]
Performance measurement should not be reduced to the evaluation of fund returns alone, but
must also integrate other fund elements that would be of interest to investors, such as the
measure of risk taken. Several other aspects are also part of performance measurement:
evaluating if managers have succeeded in reaching their objective, i.e. if their return was
sufficiently high to reward the risks taken; how they compare to their peers; and finally whether
the portfolio management results were due to luck or the managers skill. The need to answer all
these questions has led to the development of more sophisticated performance measures, many of
which originate in modern portfolio theory. Modern portfolio theory established the quantitative
link that exists between portfolio risk and return. The Capital Asset Pricing Model (CAPM)
developed by Sharpe (1964) highlighted the notion of rewarding risk and produced the first
performance indicators, be they risk-adjusted ratios (Sharpe ratio, information ratio) or
differential returns compared to benchmarks (alphas). The Sharpe ratio is the simplest and best
known performance measure. It measures the return of a portfolio in excess of the risk-free rate,
compared to the total risk of the portfolio. This measure is said to be absolute, as it does not refer
to any benchmark, avoiding drawbacks related to a poor choice of benchmark. Meanwhile, it
does not allow the separation of the performance of the market in which the portfolio is invested
from that of the manager. The information ratio is a more general form of the Sharpe ratio in
which the risk-free asset is replaced by a benchmark portfolio. This measure is relative, as it
evaluates portfolio performance in reference to a benchmark, making the result strongly
dependent on this benchmark choice.
Portfolio alpha is obtained by measuring the difference between the return of the portfolio and
that of a benchmark portfolio. This measure appears to be the only reliable performance measure
to evaluate active management. In fact, we have to distinguish between normal returns, provided
by the fair reward for portfolio exposure to different risks, and obtained through passive
management, from abnormal performance (or outperformance) due to the managers skill (or
luck), whether through market timing, stock picking, or good fortune. The first component is
related to allocation and style investment choices, which may not be under the sole control of the
manager, and depends on the economic context, while the second component is an evaluation of
the success of the managers decisions. Only the latter, measured by alpha, allows the evaluation
of the managers true performance (but then, only if you assume that any outperformance is due
to skill and not luck).
Portfolio return may be evaluated using factor models. The first model, proposed by Jensen
(1968), relies on the CAPM and explains portfolio returns with the market index as the only
factor. It quickly becomes clear, however, that one factor is not enough to explain the returns
very well and that other factors have to be considered. Multi-factor models were developed as an
alternative to the CAPM, allowing a better description of portfolio risks and a more accurate
evaluation of a portfolio's performance. For example, Fama and French (1993) have highlighted
two important factors that characterize a company's risk in addition to market risk. These factors
are the book-to-market ratio and the company's size as measured by its market capitalization.
Fama and French therefore proposed three-factor model to describe portfolio normal returns
(Fama-French three-factor model). Carhart (1997) proposed to add momentum as a fourth factor
to allow the short-term persistence of returns to be taken into account. Also of interest for
performance measurement is Sharpes (1992) style analysis model, in which factors are style
indices. This model allows a custom benchmark for each portfolio to be developed, using the
linear combination of style indices that best replicate portfolio style allocation, and leads to an
accurate evaluation of portfolio alpha.

Union Bank of India
Union Bank of India (UBI) (BSE: 532477) is one of the largest government-owned banks of
India (the government owns 60.13% of its share capital). It is listed on the Forbes 2000, and has
assets of USD 13.45 billion. All the bank's branches have been networked with its 6420 ATMs.
Its online Telebanking facility are available to all its Core Banking Customers - individual as
well as corporate. It has representative offices in Abu Dhabi, United Arab Emirates,
Beijing, Peoples Republic of China, London, Shanghai, and Sydney, and branches in Hong
Kong,Dubai(Dubai International Financial Centre) and Antwerp, Belgium.
The bank is in the process of upgrading its representative offices in London and Sydney to
branches. UBI is active in promoting financial inclusion policy and is a member of the Alliance
for Financial Inclusion (AFI).
Union Bank of India (UBI) was registered on 11 November 1919 as a limited company
in Mumbai and was inaugurated by Mahatma Gandhi. At the time of India's Independence in
1947, UBI only had four branches - three in Mumbai and one in Saurashtra, all concentrated in
key trade centres. After Independence UBI accelerated its growth and by the time the
government nationalised it in 1969, it had grown to 240 branches in 28 states. Shortly after
nationalisation, UBI merged in Belgaum Bank, a private sector bank established in 1930 that
had itself merged in a bank in 1964, the Shri Jadeya Shankarling Bank. Then in 1985 UBI
merged in Miraj State Bank, which had been established in 1929. In 1999 the Reserve Bank of
India requested that UBI acquire Sikkim Bank in a rescue after extensive irregularities had been
discovered at the non-scheduled bank. Sikkim Bank had eight branches located in the North-east,
which was attractive to UBI.
UBI began its international expansion in 2007 with the opening of representative offices in Abu
Dhabi, United Arab Emirates, and Shanghai, Peoples Republic of China. The next year, UBI
established a branch in Hong Kong, its first branch outside India. In 2009, UBI opened a
representative office in Sydney, Australia.
At present, the offshore banking operations of Union Bank of India are led by its branches in
Hong Kong and newly opened branch in Dubai at Dubai International Financial Centre.

Established in 1995, as the 8th indigenous Bank, Union Bank is positioned to be the preferred
Bank for the Small and Medium Enterprises and Retail sectors in Sri Lanka. As one of Sri
Lanka's fastest growing Banks, Union Bank offers its preferred customer segments a range of
comprehensive financial solutions to support the development and growth of these sectors.
Known for its strong shareholder strength which includes high caliber local and foreign
investors, financial stability, innovative range of technology-driven products, supported by
superior service delivery enables Union Bank to forge ahead as a key player in the Banking
industry in Sri Lanka.
In order to deliver the Bank's unique value proposition to customers, Union Bank continues to
expand its reach rapidly in Sri Lanka through its growing branch network which also includes 7
branches in the Northern and Eastern provinces in the country. A number of new branches are
expected to open in several new areas in the coming year and beyond, which is specially focused
and geared to grow Union Bank's SME portfolio.
Listed in the Colombo Stock Exchange in March 2011, the Bank's Initial Public Offering (IPO)
received overwhelming response making the IPO one of the highest oversubscribed in Sri Lanka
and globally further highlighting public confidence in Union Bank as a rapidly progressing and
potential business entity.
The Bank's expansion also includes the Bank actively pursuing opportunities for related
diversifications in the Finance Industry and as such acquired 51% stake in National Asset
Management Limited, Sri Lanka's premier Asset Management Company in February 2011 and
subsequently in November 2011, acquired 98% of voting shares with a strategic foreign investor
Shorecap in The Finance and Guarantee Company Limited, one of Sri Lanka's oldest finance
companies established in 1961.
August 2014, UBC announced it has entered into an investment agreement with Culture
Financial Holdings Ltd. an affiliate of TPG, a leading global private investment firm with over
$59Bn of capital under management. The investments is one of the largest foreign direct
investments into Sri Lanka in recent years and places Union Bank amongst the top 5 banks in Sri
Lanka. Under the agreement, TPG will invest up to approximately US$117 million ( or LKR
15Bn) in UBC through a combination of primary and secondary shares, representing up to 70%
of the issued share capital.

Union bank Asset Management Group
Union Banks Asset Management Group offers you a complete range of financial planning,
investment and estate servicesall from the same source you already rely on for your personal
and business banking. Regardless of the current value of your savings, portfolio or estate, Union
Banks experienced advisors are happy to work with you to develop a plan and identify strategies
that will help you manage your money and assets to meet your goals.
Our wide range of expertise includes:
Investment Management from advisory to fully managed accounts
Personal Trusts with the fiduciary services you expect
Retirement Strategies tailored to your lifestyle
Estate Services covering both planning and settlement
Commercial Client Services including escrow, investment management and custodial
Investment Management
All of our clients are unique. That's why from the very first moment we meet with you, we listen.
We believe listening is the basic ingredient of all good relationships. What we learn from you
forms the basis for our recommendations. Understanding your present need is crucial to laying
the foundation for your investments and for your familys future. Add a strong local presence to
our experience, and the result is excellent service, insight and care that you can count on over
time. We believe you deserve that!
Our investment strategy balances your risk with careful diversification to reduce your overall
We offer:
Advisory accountsfor investors who like a hands-on approach to their investments,
but whom also want to work with an expert.
Custodial accountsincludes safekeeping of securities and record keeping. A custodial
account can also be a retirement account managed for eligible employees by a custodian.
Fully managed accountscompletely managed personalized asset management and
investment portfolios tailored to your specific needs.
Personal Trusts

Protecting your assets just makes sense, and to do that well you need the counsel of a trustworthy
financial advisor. Union Banks expert staff, long history and solid reputation ensure you that the
guidance and service you receive will help establish your financial security.
One of the most effective means of guarding your estate is setting up a trust. The trust can
include a variety of assetsmoney, real estate, furniture, etc. The trust itself is a financial
agreement used to benefit either a person (child, spouse or whomever) or group of people (a
charity, other non-profit or cause, etc.).
Living trusts" provide for the control and use of your assets during your lifetime and are
distributed when you die as directed by the trust. The probate process is avoided for assets put
into the trust.
Testamentary trusts" take effect when you die and are tied to a will. A testamentary trust can
help distribute your assets to those you wish to inherit at a future date.
A Union Bank Asset Management advisor can offer you the financial services and management
required to deliver on your wishes, including:
A revocable trust is in place as long as the grantor is still living; at any time, the grantor
can revoke the trust.
An irrevocable trust cannot be changed.
A charitable trust is an irrevocable trust set up to benefit a charitable organization.
A supplemental needs trust is for someone who has special needs or requirements.

Retirement Strategies

It is never too early to consider your retirement. A Union Bank Asset Management advisor can
create a multifaceted plan for your retirement that matches your goals and dreams. We select
among traditional and non-traditional investment vehicles based on your income, assets and
lifestyle so that your hard work pays off. We also keep an eye to how your retirement
investments should be structured given the stage of life you are in. Long-term vision and sensible
balancing of your portfolio can make all the difference.
Retirement services we offer include:
Traditional IRAs
Roth IRAs
Investment Management

Estate Services

Estate Planning & Settlement
The best way to ensure that your beneficiaries receive what you wish them to is to have a clear,
well-thought-out, documented plan of action, with due consideration given to taxes and other
issues. Union Bank Asset Management advisor will give you the guidance you need to ensure
that your wishes are followed and that those you care for are the recipients.
As executor of your estate, we will relieve family members from the daunting tasks of satisfying
debts, settling taxes and distributing assets following the passing of a loved one. Most of all,
we'll afford you the piece of mind knowing that your matters will be dealt with in the most
professional of manners.

Commercial Client Services

Union Bank's Asset Management Group offers escrow, investment management and custodial
services to commercial clients.
Investment management
Custodial services

Union KBC Mutual Fund

Union KBC Asset Management Company Private Limited (the AMC) offers approved
investment funds, open-ended equity funds and other structured products, so as to bridge the gap
of investor's financial needs.
The AMC will leverage on KBC Asset Management's expertise in the global fund markets and
KBC Asset Management's Joint Support Model with Union Bank of Indias unrivalled brand
value, knowledge of their customers and extensive network, which will represent the perfect
blend of ingredients to create a strong asset management business in India.

Sponsor: Union Bank of India and KBC Participations Renta
Trustee: Union KBC Trustee Company Private Limited
Investment Manager: Union KBC Asset Management Company Private Limited
Statutory Details: Union KBC Mutual Fund has been set up as a Trust under the Indian Trusts
Act, 1882

"Be the bridge of opportunity for investors to achieve sustainable prosperity through responsible
investing in the capital markets"
"We want to be recognized as the mutual fund that provides the right product to the right client at
the right time. We want to be known for our knowledge-based customized approach that helps us
offer the right financial solutions to our customers by understanding their needs better. We want
our employees to work towards and help us create an industry role model. We want to promote
an investment culture that believes in long term, systematic wealth creation. We want to reach
out to the ever growing number of aspiring investors through our strong distribution network."


Equity schemes of a mutual fund invest predominantly in equity shares of companies (Equity
shares are share in the capital of a company. A shareholder receive dividend from the profits
made by the company) and equity-related investments like convertible debentures. These
schemes offer long term appreciation of the capital subject to the movement of the equity
markets over the term that the capital is invested. Equity Funds are also subject to volatile
changes in the value. The level of equity funds can differ depending upon the investment
strategies adopted by the fund manager managing the respective scheme; however equity funds
can be considered to be medium to high risk investments

The Scheme has the following Plans across a common portfolio:
Direct Plan: Direct Plan is only for investors who purchase /subscribe Units in the Scheme
directly with Union KBC Mutual Fund and is not available for investors who route their
investments through a Distributor.
Investors who purchase/ subscribe Units in the Scheme through a Distributor will be
allotted units under the Scheme but not under the Direct Plan. The Direct Plan shall have a
lower expense ratio to the extent of distribution expenses, commission, etc and no
commission for distribution of Units will be paid / charged under the Direct Plan.

The Direct Plan shall have a lower expense ratio to the extent of distribution expenses,
commission, etc and no commission for distribution of Units will be paid / charged under the
Direct Plan.

The Scheme has the following Plans across a common portfolio:
Direct Plan: Direct Plan is only for investors who purchase /subscribe Units in the Scheme
directly with Union KBC Mutual Fund and is not available for investors who route their
investments through a Distributor.
Investors who purchase/ subscribe Units in the Scheme through a Distributor will be
allotted units under the Scheme but not under the Direct Plan. The Direct Plan shall have a
lower expense ratio to the extent of distribution expenses, commission, etc and no
commission for distribution of Units will be paid / charged under the Direct Plan.

The Direct Plan shall have a lower expense ratio to the extent of distribution expenses,
commission, etc and no commission for distribution of Units will be paid / charged under the
Direct Plan.


Liquid schemes of a mutual fund are primarily used as a cash management tool.Liquid funds
basically invest in short term debt and money market securities. The maturity of such securities
is less than or equal to 91 days, for example commercial papers, CODs, treasury bills. The main
source of income in such a short term security is interest, because in such a short tenure price
fluctuation is less and hence risk of NAV fluctuation is also low. The return with such a fund is
low as compared to the others because of the higher safety of principal and liquidity. They are
predominantly used by those investors who want to invest their excess funds for a short tenure.


The Scheme has the following Plans across a common portfolio:
Direct Plan: Direct Plan is only for investors who purchase /subscribe Units in the Scheme
directly with Union KBC Mutual Fund and is not available for investors who route their
investments through a Distributor.
Investors who purchase/ subscribe Units in the Scheme through a Distributor will be
allotted units under the Scheme but not under the Direct Plan. The Direct Plan shall have a
lower expense ratio to the extent of distribution expenses, commission, etc and no
commission for distribution of Units will be paid / charged under the Direct Plan.

The Direct Plan shall have a lower expense ratio to the extent of distribution expenses,
commission, etc and no commission for distribution of Units will be paid / charged under the
Direct Plan.

The Scheme has the following Options across a common portfolio:
Growth Option:This option is suitable for investors who are not looking for current income but
who invest only with the intention of capital appreciation.
Dividend Option:This option is suitable for investors seeking income through dividend declared
by the Scheme. Under this Option, the Scheme will endeavour to declare dividends from time to
time. The dividend shall be dependent on the availability of distributable surplus.
The Dividend option has the following facilities:

In cases where the investor fails to opt for a particular Option at the time of investment, the
default Option will be Growth. If the investor chooses Dividend Option and fails to mention
facility then the default facility will be Reinvestment.


Hybrid Schemes of a mutual fund invest in various asset classes and gives the investors a higher


The Scheme has the following Plans across a common portfolio:
Direct Plan: Direct Plan is only for investors who purchase /subscribe Units in the Scheme
directly with Union KBC Mutual Fund and is not available for investors who route their
investments through a Distributor.
Investors who purchase/ subscribe Units in the Scheme through a Distributor will be
allotted units under the Scheme but not under the Direct Plan. The Direct Plan shall have a
lower expense ratio to the extent of distribution expenses, commission, etc and no
commission for distribution of Units will be paid / charged under the Direct Plan.

The Direct Plan shall have a lower expense ratio to the extent of distribution expenses,
commission, etc and no commission for distribution of Units will be paid / charged under the
Direct Plan.

The Scheme has the following Options across a common portfolio:
Growth Option:This option is suitable for investors who are not seeking dividend but who invest
only with the intention of capital appreciation.
Dividend Option:This option is suitable for investors seeking income through dividend declared
by the Scheme. Under this Option, the Scheme will endeavour to declare dividends from time to
time. The dividend shall be dependent on the availability of distributable surplus.

The Dividend option has the following facilities:
Dividend Reinvestment Facility
Dividend Pay-out Facility
Dividend Sweep Facility
In cases where the investor fails to opt for a particular Option at the time of investment, the
default Option will be Growth Option. If the investor chooses Dividend Option and fails to
mention Facility then the default Facility will be Dividend Re-investment Facility.
If the dividend payable under the Dividend Sweep Option is equal to or less than Rs. 500 then
the dividend would be compulsorily reinvested in the existing option of the Scheme.
If an investor opts for Dividend Sweep Option, the investor must meet the minimum balance
criterion in the target scheme and in the same folio; else the dividend will be compulsorily re-
invested in the source scheme.