Frequently Asked Questions - Discretionary Portfolio Management

What is Dicretionary Portfolio Management?

Discretionary Portfolio Management is a private service offered by Garanti Asset Management to corporations and high net worth individuals. Within the scope of this service, the assets of investors, is managed professionally in line with the benchmark, considering risk preferences. Garanti Asset Management manages as a representative, the portfolios created to include capital market instruments, based on the authority vested to it by the Capital Markets Board.

The essence is income maximization according to the preferred level of risk.

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Who can use Discretionary Portfolio Management services?

Garanti Asset Management provides portfolio management services to individual and corporate investors having a certain Portfolio size.

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What kind of information is given to clients with respect to their Portfolios?

Investors may have all information about their portfolios from Garanti Asset Management at any time upon request. . Also, investors may have access to their account details through Garanti Asset Management or Garanti Custody website using their own private password.
In addition, weekly, monthly and periodical “Performance Information Reports” are sent to investors.

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What is Benchmark?

The accuracy of investment decisions must be tested by calculating the alternative costs of investments made according to the decided risk level. A benchmark is needed to evaluate the incomes of investments managed by the portfolio management company and to create a basis for performance remuneration that will occur at term ends.

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What are the benchmarks used in Discretionary Portfolio Management?

Investment instruments which the investors are intended to invest in constitute a basis for the benchmark. Benchmarks have been classified under 3 main headings, namely, TL, foreign currency and stocks with the aim to offer different alternatives to clients with different risk profiles. Examples of benchmarks are given in the following:

For portfolios managed in TL,

Garanti Bank Quarterly TL Deposit Account Rate
Turkish Institutional Investment Managers' Association Indexes (KYD 365 Bond Index – KYD 182 Bond Index)

For detailed information: www.kyd.org.tr

For portfolios managed in foreign currency,

Garanti Bank Quarterly Foreign Currency Deposit Account (USD/EUR) Rate

For portfolios managed as Stocks,

ISE 30 Index
When determining the benchmarks, the products in one single group may be used or they may be selected from mixed portfolios created from different groups.

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How long is the performance period?

Performance period is 1 year

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What is the method of remuneration in Discretionary Portfolio Management?

Two different commissions are collected from corporations in consideration of the services given.

Management commission: In portfolio management, the management fee is calculated on the total value of the portfolio managed daily and is collected on the first business day of the following month.

Performance commission: A certain part of the income obtained in excess of the benchmark defined at the end of performance periods is collected as “performance commission” at the end of the performance period.

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Is income guaranteed?

Any guarantee of the income has been prohibited by the Banking and Capital Market Legislation (Serial V No: 59).

Consequently, no income is guaranteed for a certain period of time in the future. However, incomes obtained in the past and their comparison with other investment instruments, are issued in reports.

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