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Q & A (English)

Q & A (English)

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Published by Sameh Wagdy

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Published by: Sameh Wagdy on Mar 25, 2011
Copyright:Attribution Non-commercial


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Pharos Fund IQ & A
What is Pharos Fund I?
Pharos Fund I is an open-ended equity fund that aims at long-term capitalappreciation through investments in listed equities, primarily in Egypt & theirrespective GDRs listed on foreign stock markets, and with a maximum of 20%exposure in MENA markets.
Who is the investment manager?
The investment manager is Pharos Asset Management, a wholly owned
subsidiary of Pharos Holding Company. Pharos Holding’s issued and paid
- incapital is EGP 123 million. Dr. Mohamed Taymour founded Pharos Holding in2005.The asset management team has an extensive experience in the field of financialservices, specifically asset management.
Who should invest in the fund?
The fund is open to all investors interested in investing in the stock market.However it is particularly suited for both investors that do not have the technicalexpertise to invest in the market or those that do have the expertise but do nothave the time to follow the markets closely.
Is now the right time to invest?
Research has proven that investors cannot time the markets, and equity marketsoutperform fixed income over the long term. In the last 12 months the globaleconomy was hit by both a meltdown in financial system and a global recession.Reforms implemented in the Egyptian banking sector starting the early 2000shave protected the local market from the grave impacts of the global financialcrisis, leaving Egypt suffering only the impact of reduced aggregate demand.However in the last 12 months the Egyptian stock market was among the worsthit by the global financial crisis. Currently Egypt is among the cheapestemerging markets and hence it is expected to perform well in the coming period.The fund also has the flexibility to invest up to 20% in markets in the region thatPharos believes is undervalued.
How are investment decisions taken in the fund?
An investment committee comprised of the top management of the companymeets quarterly to analyze the investment themes and those sectors most affected.A weekly meeting follows up on any changes in the strategy and performance.The fund also has a dedicated fund manager that additionally follows the marketson a daily basis.
 Economic and company analysis is based on research from all investment banksthat pharos deals with, in addition the asset management team conduct their ownprimary research and meetings with the management of companies we areinterested to invest in.
How is pharos fund different from a fund issued by a bank?
From a compliance and operational perspective there is no difference.The pharos fund I, is issued by Pharos Fund Company, whose board iscomprised of 3 members two of which are independent members (Dr. Nabil ElAraby and Mr. Sameh Sabour). The Fund, as all other funds, is regulated by theCapital Markets Authority.The bank that receives all the subscription and redemption requests and has anycash owned by the fund is Arab African International Bank.The assets are all held by an independent custodian, in this case Arab AfricanInternational Bank. While the registry of all the certificate holders as well ascalculating the NAV daily is done by Arab African International Bank administrative services.Finally all trading transactions are settled on a delivery versus payment system toeliminate any risk from brokers.
What is the Net Asset Value (NAV) of a certificate?
Pharos Fund I price per certificate is the EGP amount of the fund calculated bydividing the total value of all the assets in its portfolio less any liabilities, dividedby the number of fund certificates outstanding.The NAV per certificate is calculated at the closing prices of the securities in thefund and the certificate price (NAV) will be announced at the end of eachbusiness day.
Who calculates the NAV of the fund?
A separate entity, in charge of the administrator role, will calculate the NAV.
Arab African International Bank will act as the fund’s administrator.
Where does my money go?
At any point in time, the bank account held at Arab African International Bank inthe name of the fund will hold cash and/or shares purchased in the name of thefund and held with the custodian (which is Arab African International Bank).The administrator will keep track of all investors in the fund and their respectivenumber of certificates.

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