Question: How risky is Mansa-X on a scale of 1-10 and why?
Answer: I’d say a 3.
In today’s market, Mansa-X is one of the highest performing risk-adjusted investments available. However, before we dig into why Mansa-X is a viable investment, let’s start by understanding what is Mansa-X, where does Mansa-X invest and key features of the fund.
What is Mansa-X?
Mansa-X, a product by the Standard Investment Bank (SIB), is a CMA-certified multi-asset strategy fund with a long/short trading model that invests in financial instruments, both local and global, with the primary objective of realizing capital growth for its investors.
Locally, Mansa X focuses on NSE Equities, Cash & Cash Equivalents, NSE derivatives fixed income, and Exchange-Traded Funds (ETFs) while globally, the investment fund invests in single stocks, stock indices, currencies, commodities, fixed income, derivatives, and precious metals. The fund utilizes complex portfolio allocation techniques while hedging capital exposure.
Mansa-X exists in both KES & USD options for both local investors and investors in the diaspora.
Where does Mansa-X invest?
Mansa-X is a highly diversified fund, investing in a wide range of asset classes both locally and globally. Locally, they invest in the following assets:
- Fixed income
- Cash & Cash equivalents
- NSE equities
- NSE derivatives
- Exchange-Traded Funds (ETFs)
Globally, the fund invests in:
- Single stocks
- Stock indices
- Cash & Fixed income
- Precious metals
The fund invests mainly in the world’s major global stock exchanges such as the New York Stock Exchange (NYSE), London Stock Exchange (LSE), Frankfurt Stock Exchange (FRA) and Hong Kong Stock Exchange (HKG). The fund also creates exposure to futures and options for metals, commodities and interest rate products.
Features of Mansa-X
- 0% Initial Fee.
- 0% Redemption Fee.
- Minimum Investment KES. 250,000 ($2,500).
- Minimum Top-up KES. 100,000 ($1,000).
- 5% Annual Management Fee – prorated daily over 365 days.
- 10% Performance Fee – applied on the surplus when a return above the 25% hurdle rate is attained on KES Fund.
- Initial 6 Month Lock-In-Period.
Why Should You Invest in The Mansa-X Fund?
Several factors are taken into consideration before choosing an investment fund, such as the risk, return rate, minimum investment, and company reputation, among others.
So, back to the question – why should you invest in Mansa-X? Here’s why:
a) Diversification – Investors’ funds are diversified across over 100 assets at any given moment. This considerably limits concentration risk by spreading investments across different asset classes, industries, sectors, geographic regions, and investment styles. Even while diversifying, the fund ensures that any single asset does not hold more than 1% of the fund AUM to further limit risk.
b) Long/Short Trading Model – This trading approach involves taking long positions in securities expected to appreciate and short positions in securities expected to decline, which can provide some inherent risk mitigation. With such a position, and at least in the short term, it is possible for the fund to remain profitable by shorting declining assets in the early stages of a recession.
c) Take Profit/Loss Limits – The fund has limits in each position we are holding. When profitable, the traders also watch for the downside should a position plateau or take a decline. When losing, traders have a loss limit of 1% of funds they are holding in any individual asset before they are automatically ejected from trade to ensure gains are consolidated.
d) Active Management – The fund positions are actively managed while taking into account real-time developments in the local and global markets, as well as actionable insights that then go into reviewing and adjusting our existing positions.
The above strategies work in tandem on a real-time basis to ensure the fund actively monitors and mitigates risk.