Eurobank Tekfen offers a variety of
alternatives to turn your savings into investments.
Repo
Repo is the sale of a contract to repurchase a fixed-return
security after a specified period of time has elapsed.
Repo contracts are available for terms of varying lengths
and as short as one day.
Repo allows you to easily manage your cash flow by deciding
what terms (days, weeks, months) are most suitable to
your needs.
You do not need to open a separate investment account
for repo.
Repo requests must be made within the transaction times
and limits set by the bank.
Mutual Funds
Mutual funds are a form of collective investment. Investors
purchase shares in the fund and the money received in
this way is invested by professional fund managers in
a portfolio of securities. Mutual funds are a convenient
way to channel even small savings into investment and
they offer the advantage of being easy to turn back into
cash. The income received on mutual funds is tax-exempt
until the end of 2005.
All you need to buy and sell mutual fund shares is a demand
account.
Mutual funds invest in a variety of different securities
such as T-bills, company shares, and repo contracts. The
funds are managed by professional managers who keep a
close eye on markets so as to balance and diversify their
portfolio risks.
There are two types of mutual funds in Turkey called
"Type A" and "Type B".
A Type A mutual fund is required by law to invest at
least 25% of its portfolio's value (on a monthly weighted
average basis) in companies whose shares are traded
or are to be traded on the Ýstanbul Stock Exchange.
Type B mutual funds on the other hand are not subject
to any such portfolio composition requirements. The
portfolios of these funds usually consist of fixed-return
capital market vehicles.
Type B money-market fund shares can be bought and sold
during trading hours even on the same day. In the case
of shares in other Type B funds, at least one business
day's notice must be given in advance. During the notification
period, the money corresponding to the value of the
shares that are to be purchased is kept by Eurobank Tekfen
in an overnight repo contract.
Eurobank Tekfen Mutual Funds
Type B money-market fund
This fund's portfolio consists entirely of repo or short-term
investment vehicles. This is the most highly liquid
and risk-free of all mutual funds and is a convenient
way to put your short-term investments to work.
Type B balanced fund
The portfolio of this fund consists of government bonds
and T-bills and repo contracts. This fund is balanced
from the standpoint of risk because it incorporates
both government securities and repo contracts.
Government bonds and T-bills
If you're looking for a way to secure a safe, fixed
return on your investments in the medium or long term,
you should consider investing in government bonds and
T-bills.
T-bills are public debt instruments with terms of less
than a year issued by the Turkish Treasury while government
bonds have maturities of one year or more. Both may
be issued in Turkish liras or foreign currencies and
may also be indexed to foreign currencies.
To trade in government bonds and T-bills all you need
is a demand account. If you hold onto government bonds
and T-bills until maturity, the repayment of the principal
and interest on them is guaranteed by the Turkish Treasury.
T-bills are highly liquid and can be converted to cash
at any time. If sold before maturity, the market conditions
applicable to them on the date they are sold on the
secondary market will apply. T-bills enjoy a number
of tax advantages. Through Eurobank Tekfen you can also take
part in government bond and T-bill auctions and in bond
and bill public offerings made by the Treasury.
Eurobonds
A Eurobond is a bond that has been issued by a country
or company in one country's currency but is traded outside
of that country and in a different monetary system.
Eurobonds are a new and usually long-term investment
vehicle that has become available for Turkish investors.
While the most common type of Eurobond is denominated
in US dollars, there are also euro, yen, Swiss franc,
and other currency Eurobonds as well.
Eurobonds are suitable vehicles for investors interested
in investing in foreign currencies on a long-term basis.
Their maturities at issue vary between five and thirty
years.
On the secondary market, the standard value date is
transaction date + three business days.
Eurobond coupons usually come with a fixed rate of interest
but there are also Eurobonds with variable-rate coupons.
Although these are long-term issues, they can be converted
to cash without waiting for them to mature, in which
case the market conditions prevailing at that time will
be applicable.
Eurobonds are normally issued as bearer instruments
but they are not physically delivered to the buyer.
Eurobond coupon interest is not subject to withholding
for tax.
The recipient of Eurobond interest is responsible for
reporting it to tax authorities.
The margin between the buying and selling quotes of
Eurobonds varies according to the liquidity of the issues
and the size of the transaction.
Our Bank sells Eurobonds in lots valued in whole multiples
of USD 1,000 or the equivalent in another currency.
The minimum lot size is USD 10,000.
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