Marketprog Bond

Derivative Bond Fund

About the fund

The MARKETPROG Bond Fixed Income Derivative Fund is an actively managed absolute return fund that aims to profit from short-term (holding period generally up to 2 weeks) long/short positions in Central Eastern European government bonds and derivatives.

The investment manager pays particular attention to high-level and effective risk management in order to keep volatility at an acceptable level. In tailoring the composition of the Fund, the investment manager determines the weight of jdifferent asset groups dynamically, depending on the market situation and strategy pursued. The investment manager pays special attention to the fluctuations of the market sentiment, besides fundamental analyses, and also uses the tools of technical analysis on timing the market entry.

The potential investment area is mainly but not exclusively the bond market of Central and Eastern Europe, and its derivatives markets. Furthermore, the Fund also may invest in the instruments of the global foreign exchange market for speculative and hedging purposes.

The Fund may take leveraged, long (buying) and unfunded short (sale) positions, taking the limits and multipliers laid down in legislation into account, but its total netted risk exposures may not be more than twice the net asset value taken into account at a value calculated with the correction under Governmental Decree 78/2014. (III. 14.).

The hurdle rate is the performance of ZMAX Index for HUF classes and the average of the monthly EURIBOR rates for the EUR class.

Risk-return profile of the fund

Reduced risk, lower yield				Increased risk, higher yield
←				→
1	2	3	4	5	6	7

The risk/reward profile relates to the past and does not constitute a reliable indicator of the future risk/reward profile. The classification to category 1 does not mean that it is a risk-free investment. Risk category may shift over time. The Fund is classified as risk category 5 based on its past exchange rate fluctuations, or a similar portfolio or an applicable determination of risk. The high risk category is due to the fact that the Fund invests its assets largely in foreign bonds or futures contracts, and these are characterised by a significant exchange rate fluctuation. The risk/reward profile indicated is not guaranteed to remain unchanged and the risk category may shift over time. Even the lowest risk category does not mean that there are no risks associated with the investment. When classifying an investment unit to a risk class, the calculation model may not take all risks into account.
The following risks are the ones that were not considered during the risk classification, but which are of relevance to the Fund:

Risk arising from the use of derivative contracts: The Fund may use derivative contracts not only for hedging purposes, but as an active investment vehicle. Thereby the risk of fluctuations in the value of Fund increases. Derivative contracts present a much higher risk by their nature compared to investment schemes without leverage. Though these risks may be reduced with investment techniques, they cannot be eliminated entirely.

Credit Risk: The Fund invests a part of its assets in debt securities and/or money market instruments. There is a risk that issuers become insolvent (or their solvency falls), and these bonds and/or market instruments lose their value partly or entirely.

Liquidity risk: There is a risk that a position or security cannot be sold in time at a suitable price. This may lead to the suspension of the redemption of investment units.

Risk of settlement failures: The Fund enters into contract with different contracting parties. There is a risk that these contracting parties do not satisfy the claims of the Fund, for example as a result of insolvency.

Operational risk, risk in respect of safekeeping: There is a risk of losses, which are due to internal procedures/malfunctioning of systems or external events (for example natural disasters). Safekeeping carries the risk of loss of assets of the Fund, which may be caused by the insolvency of a depositary or a sub-depositary, the breach of their duty of care, or misuse.

Foreign exchange risk: The Fund may also invest in instruments issued or settled in other currencies, in addition to HUF-denominated assets, therefore it is also exposed to currency risk, and, to reduce this risk, the Fund may enter into derivative contracts for hedging purposes. But these contracts cannot completely eliminate the total exchange-rate risk.
Details about risks can be found in section ‘IV. Risks’ of Rules on Management.

Basic data

Type, description

Public, open-ended
Strategy

Absolute return, fixed income
Geographical exposure

Central and Eastern Europe
Foreign exchange

EUR, HUF
Buy investment unit

T+2
Redeem investment unit

T+6
Trading periods

On every bank workday
Management fee

2% (1% in case of "I" series)
Hurdle rate

EURIBOR/ZMAX
Performance fee

15%
ISIN codes

HU0000714555 (HUF series) | HU0000714688 (HUF I series) | HU0000714548 (EUR series)
Portfolio manager

Istvan Varkonyi
Depositary

Erste Bank Hungary Zrt.
Auditor

PricewaterhouseCoopers Hungary
Fund manager

Marketprog Asset Management Zrt.

Start of period
End of period

Data set

Date

NAV

Currency

AuM

Benchmark

Distributors

MARKETPROG Asset Management Ltd.
Hungary, H-1124 Budapest
Csörsz street 45.
MOM Office Park, SAS Tower, 5th floor.

Phone: +36 1 213 4210, +36 1 213 4211
Fax: +36 1 213 4219

Concorde Securities Ltd.
Hungary, H-1123 Budapest
Alkotás street 50.
Alkotás Point Offices
info@con.hu

SPB Investment Inc.
Hungary, H-1051 Budapest
Vörösmarty square 7-8.
Gerbeaud Offices
Phone: +36 1 483-2610
Fax: +36 1 483-2615

Disclosures

Document

Published