BSTAR is a foreign investment fund (FIF) as a feeder fund* which will invest no less than 80% of its investment units in a single foreign mutual fund (master fund) during the accounting year.
BSTAR will invest in investment units of Citigroup S&P Global Star 80% Protected Fund (CGSPSPU), a mutual fund under the management of Citigroup Global Markets Limited. BSTAR will allocate not less than 80 percent of its NAV in CGSPSPU which invests in the 25 stocks using the methodology prescribed by Standard & Poor’s (S&P). The CGSPSPU will allocate 40% of its investments in the US, 40% in the EU, and 20% in Asia. It will invest in no more than three stocks in a single sector in the US, no more than two stocks in a single sector in Europe, and no more than two stocks in a single sector in Asia. (Allocation of investments has been a main policy of Citigroup Global Markets Limited since the establishment of the fund.)
The remaining may be invested in local or overseas securities or assets as approved by the Securities and Exchange Commission (SEC) of Thailand.
(The CGSPSPU has a retail fund feature whose aim and its mechanism intends to protect 80% of highest NAV starting from the beginning of the fund establishment in the US dollars.)
In addition, BSTAR can also invest in derivatives contracts to manage exchange rate risks or other risks which may arise from investing overseas, as approved by the SEC. However, BSTAR will not invest in structured notes.
Initial risks of BSTAR include:
- The risk from CGSPSPU’s investments in equities
- The risk from exchange rates. Although the CGSPSPU protects investment capital in US dollars equivalent to 80% of its NAV at the highest point, BSTAR remains exposed to the risk of exchange rate fluctuations and the expenses of the fund.
BSTAR is suitable for investors who:
- Wish to diversify risks and seek investment returns from overseas investments
- Expect a high rate of return in the long-term from the 25 stocks using the methodology prescribed by S&P
- Are able to bear the risks from fluctuations in stock markets, but need to limit the risks of investing in equities (The CGSPSPU intends to protect 80% of highest NAV starting from the beginning of the fund establishment in the US dollars**)
- Understand the risks of investing in other currencies.
**The 80% capital protection is a mechanism of the Citigroup S&P Global STARS 80% Protected Fund which does not cover investments in BSTAR, which remains exposed to the risks of exchange rates and expenses of the fund.
Significant differences between BSTAR and open-ended mutual funds in general
As BSTAR is a foreign investment fund (FIF), the investors are allowed to redeem their investment units once a month on the final working day of each month. Unit holders are required to submit a selling order three working days (T-3) before the last working day of the month. However, the investors will receive the redemption price on the last working day (T) of the month. |
