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Indigenous funds – an important development for Malta
by David Kelleher
Finance Minister John Dalli yesterday called on fund managers
not to issue recommendations that are not deal linked and to
provide clear and accurate information to investors.
Speaking at the launch of Gasan Fund Management yesterday, Mr
Dalli said it is important that recommendations are not deal
linked.
“There must be self-disciplinary restraint on speculation,
trading or recommending poorly researched stocks. Fund managers
have a fiduciary function that they are expected to discharge
in the most professional manner,” the minister said.
He told fund managers it is important that they obtain and supply
up-to-date information. “Consumers have the right to be
informed on business risks in the case of equity investments,
country risks in the case of sometimes exotic bonds and exchange
risks in the case of foreign currency denominated securities.”
Mr Dalli said the increase in indigenous funds was an important
development and the government would like to see more locally
conceived and nurtured investment instruments.
Turning to bank secrecy, Mr Dalli there is mounting pressure
in the international arena to establish an obligation on all
financial centres to exchange information between them on investments
held by each countries’ nationals.
“In such circumstances, and given the bi-partisan consensus
that we have in Malta about bank secrecy, I had stated that
Maltese investors should feel safest and most protected if their
investments are in Malta. The situation in Malta is that government,
through its departments, can only scrutinise bank accounts and
holding in funds if the final beneficiary is seeking government
social benefits and in so doing instructs the financial institution
to give information to government on request,” Mr Dalli
said.
He added that those who decide to convert their holdings in
Maltese Lira, would also have protection against exchange risk.
“This is why I recently stated that people with overseas
investments should consider seriously bringing their money back
to Malta without fear about their financial affairs being scrutinised
by the tax authorities. During this year we have re-established
equilibrium in the investment environment in Malta by redressing
the unfairness that was being created by accumulator funds that
were avoiding tax on interest by disguising them as capital
gains,” Mr Dalli said.
The manipulation of the capital gains concession, he added,
intended to boost equity holdings on the stock exchange, led
to the absurdity that investment in foreign assets were being
pushed as tax free investment. Malta was the only country in
the world that taxed interest on local securities and bank deposits
and did not tax interest in foreign securities, Mr Dalli concluded.
Gasan Fund Management is the latest addition to the Gasan Group
of Companies. Joe Gasan, chairman, said his group wanted to
play a bigger part in the financial services industry.
“We are entering the fund investment field through a new
company Gasan Fund SICAV plc, with portfolio management entrusted
to Gasan Fund Management. Ansbacher and Co Ltd, an international
wealth management group with a presence in 11 major capital
markets, will be acting as advisers,” Mr Gasan said.
Initially four new funds are being launched. Three international
funds – The Gasan International Equity Growth Fund, The
Gasan International Diversified Growth Fund, and The Gasan International
Low Risk Fund – and a local fund, The Gasan Enterprise
Fund. Ansbacher will be advising on the international funds,
while stockbrokers Curmi + Mallia will advise on the local fund.
What makes the fund different from other funds is that they
are structured as a “fund of funds” or a multi-manager
fund. This concept is a reinforcement of the practice of investing
in various separate investment funds to spread one’s risk
by identifying the best funds and bringing them together into
one fund.
A minimum of Lm500 is required to invest in the Gasan Enterprise
Fund, while a minimum of 1,500 euros is necessary for the other
three international funds.
The Equity Growth fund has an aggressive risk profile with a
3-5 year investment horizon. The base currency is the euro however
investments will not be restricted to one currency. The fund’s
benchmark is 100 per cent MCSI World index.
The Diversified Growth fund has an moderate risk profile with
a 3-5 year investment horizon. The base currency is the euro.
The fund’s benchmark is 70 per cent MCSI World index and
30 per cent JPN Global Govt. Bond Index.
The International Balanced Fund has an low risk profile with
a 3-5 year investment horizon. The base currency is the euro
and its benchmark is 30 per cent MCSI World index and 70 per
cent JPN Global Govt. Bond Index.
The company is offering a reduction of 50 per cent on the initial
feels on clients’ investments up to 22 June.
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