Managed Account (“MA”) is an absolute[1] return Discretionary Portfolio Management Account offered by OCBC Securities Private Limited (“OCBC Securities”).  Funds placed in an MA are managed on a discretionary basis. Each account is also segregated and is not commingled unlike unit trusts that are “pooled”. MA offers discerning retail investors the opportunity to enjoy privileged and differentiated discretionary portfolio management services by our investment manager Lion Global Investors Limited (“Lion Global Investors”), one of the largest asset management companies in Singapore.

• Optimised return: In bull markets, our investment manager, Lion Global Investors, may fully invest the MA so as to reap the benefits from rising stock prices, In bear markets, MA can be held substantially in cash and engage in short selling. In addition, Lion Global Investors may also make use of other investment instruments such as T-bills and Equity-Linked-Notes to optimise returns.

• Absolute return: MA aims to achieve an average annual returnof 6% (net of management fee) over a three year rolling period, but this is NOT guaranteed.

• Minimum Investment sum: You can start an MA with a minimum cash of $50,000. There is no lock-in period, minimum maintenance amount or withdrawal fee to tie up your funds.

• No front - end or back- end fees: MA charges on ly monthly management fees (“MF”) and an incentive fee based on performance (“PF”). No fees are charged on opening and closing of accounts.

• Management fee (MF): MF is based on the Net Market Value of the MA portfolio determined at the close of the calendar month and payable monthly. The rate for MF is as follows:-1.50% p.a  for Net Market Value below S$250,0001.00% p.a  for Net Market Value between S$250,000 and S$1 million0.75% p.a. for Net Market Value  above S$1 million

• Performance fees (PF): PF is an incentive fee based on performance which is only levied when the increase in the net market value of your portfolio (after management fee) exceeds our target return of 6% per annum. Performance Fee is charged at one-tenth of the excess return. For example, say the net market value of your $100,000 portfolio rose by 18% in a year, the PF is $1,200 (i.e 10% of $12,000 (since the excess return is 18% - 6% multiplied by $100,000)

• Investment Team: Lion Global Investors is one of the largest asset management companies in Singapore with an investment team of more than 50 specialists covering US, Europe and Asia Pacific markets. The average years of financial industry experience of the team is more than 10 years.

• Have prior experience investing in shares or unit trusts
• Seek to diversify their portfolios via alternative strategies
• Wish to benefit from the expertise of a professional investment team
• Need liquid investment, do not wish to be tied down to a definite investment period
• Are on a look-out to complement existing direct share investment
• Have investment objectives that are moderately aggressive to aggressive

OCBC Securities is the Manager with respect to your funds deposited to a MA opened and maintained with the Manager. OCBC Securities has appointed Lion Global Investors to act as investment managers for MA.  From 3 February 2009, Lion Global Investors will be in charge of the investment strategy and decisions for MA. OCBC Securities will continue to focus on customer service and the overall administrative, operational and execution functions for MA[2].

This strategic move is part of the rationalization of MA to allow OCBC Securities to focus on servicing customers while having an established fund management company to take care of investments. By appointing Lion Global Investors as the investment manager, MA will be able to offer to our investors at retail level, a privileged and differentiated discretionary portfolio management by one of the largest asset management companies in Singapore.

MA will be held by or through OCBC Securities. For any queries pertaining to MA, customers should continue to call OCBC Securities Managed Account Department at 6531 9857.

Lion Global Investors is one of the largest asset management companies in Singapore and the South East Asia region with assets under management of about USD18.3 billion as at 31 December 2008. 

Lion Global Investors is a member of the OCBC Group and a subsidiary of Great Eastern Holdings Limited. 

OCBC Bank, Singapore’s longest established local bank, currently has assets of SGD184 billion and a network of over 470 branches and representative offices in 15 countries (www.ocbc.com). OCBC Bank’s insurance subsidiary, Great Eastern Holdings, is the largest insurance group in Singapore and Malaysia, with about SGD45 billion in assets and three million policy holders (www.lifeisgreat.com.sg).

They have an experienced team dedicated to regional and global equities and fixed income markets. The average years of experience of each member of the investment team spans more than 10 years. Lion Global Investors' investment capabilities are greatly enhanced by its specialised teams of experienced analysts and investment managers. The firm's investment approach is team-based and research-intensive, combining in-depth market insights with comprehensive sector knowledge.

For more information on Lion Global Investors, kindly visit: www.lookforlion.com

MA targets absolute[1] or positive investment returns. That is, it aims to be profitable every year. MA portfolios aim to achieve an average annual return of 6% (net of management fee), but this is NOT guaranteed. Any investment in MA is subject to investment risks, including the possible loss of all or a substantial amount of the principal amount invested.

MA does not borrow funds. The Net Market Value of the customer’s MA represents the maximum amount that can be invested on the customer’s behalf. However, the MA may be used to borrow shares in order to engage in short selling[3]. Total short positions in any MA will not exceed the Net Market Value of the MA.

• Absolute Returns: MA targetsabsolute[1]returns, that is it aims to be profitable every year. Strategies employed in absolute return portfolios aim to produce returns independent of market performance benchmarks or indices such as the Straits Times Index.

• Structure of MA Reduces Downside Risk: Because of the focus on absolute returns, the MA portfolio is designed with an appropriate structure to reduce downside risk in bear markets. Unlike conventional equity funds, the investment manager is allowed to hold a substantial amount of cash, and even engage in short selling.

^ These are generic features that are common for unit trusts and may not apply to all types of unit trusts.

MA is not a Hedge Fund. Unlike hedge funds, MA does not employ leverage; There will be no borrowing of funds to buy shares. The Net Market Value of the customer’s MA represents the maximum amount that can be invested on the customer’s behalf.

Lion Global Investors’ investment process consists of five stages and their key objectives are identified as follows: 

• Idea generation: To hunt for ideas independently.
• Fundamental analysis: To determine a company’s sustainable earnings power, likely medium to long term growth rate and intrinsic value.
• Team deliberation: To determine the Recommended List of stocks.
• Portfolio construction: To construct a concentrated portfolio of best ideas.
• Risk Management: To ensure that risk management takes place along the entire process.

Yes, you will receive monthly statements showing the total value of your Account, details on all securities bought and sold, and cash balances.

Prior to placing a buy order, the investment manager will decide on the percentage exposure he wants in the security for the MA portfolio. He then computes the total quantity of shares to be bought. This quantity is then allocated to each client's account in accordance to pre-set portfolio percentage exposure. However, due to rounding, the percentage may vary slightly between clients.

For example: -
Percentage Exposure: 5% of total investment on aggregate basis
= $17,500 ( 5% * $350k )

Cost per share: $2.00

Total Quantity To Be Bought (round to board lots): 9,000 shares ( $17,500 / $2.00 )

Allocation to Client A:
= $50k / $350k * 9,000 shares
= 1,300 shares (round up)
= 5.2%

*All Fees are subject to GST.

There is no minimum maintenance amount required for MA. You are not required to bring in additional cash to top-up if the value of your MA falls below S$50,000.

You may request to deposit additional funds into your MA subject to the agreement of the investment managers.

To get started, you simply need to:-

• Appoint OCBC Securities to manage your funds by signing a Discretionary Portfolio Management Agreement.
• Provide the funds for management in cash (by cheque or cashier’s order).