Balanced Portfolios FAQ

What is SaxoSelect?

SaxoSelect is a fully digital and automated investment service that enables clients to invest in a wide variety of investment and trading strategies directly from their trading platform.

When you open a SaxoSelect investment, it is automatically established in a new account in the currency of the portfolio and the investment amount is transferred from your default account. SaxoSelect follows an account managed by an expert trader or fund manager and automatically copies trades on the managed account to your SaxoSelect account with minimum latency.

SaxoSelect offers three types of strategies:

Trading Strategies

Trading Strategies follow the accounts of accomplished traders with a proven trading records and offer high risk/rewards on aggressive trading strategies. The strategies typically follow a theme such as Commodity Focus and Charts & Patterns - following technical trade signals, but are also discretionary following the instincts of the expert trader.

Equity Portfolios

Equity Portfolios contain stocks and are managed by portfolio managers. The Saxo Morningstar MOAT® portfolio is built on Morningstar MOAT® methodology and is managed and implemented by Saxo Bank.

Balanced Portfolios

Balanced Portfolios for the long term investors containing portfolio of Stock and Bond ETFs built on BlackRock research. These portfolios offer attractive investment opportunities and are also ideal as repositories of funds used for margin trading, where a percentage of the value of the portfolio’s investments can be used as collateral for trading margin products such as FX, CFDs and futures.

How do I get started?

You can buy a Balanced Portfolio almost in the same way as you would buy a stock.

You simply choose the portfolio that fits your investor profile best, log in to your SaxoTrader, complete the short online process, decide how much you want to invest and your investment will be processed and implemented in real time, in front of your eyes.

The portfolio will be rebalanced automatically by Saxo Bank on a regular basis to keep the portfolio in line with your chosen risk profile.

Where can I monitor my Balanced Portfolio?

You keep full control and visibility of your Balanced Portfolio.

When you complete your investment, Saxo Bank creates a dedicated sub-account where the Balanced Portfolio will be held. This sub-account works as a folder under your existing SaxoTrader account.

In this way the Balanced Portfolio remains at your control for you to manage or stop investing when you deem it necessary.

What is a Balanced Portfolio made of?

Balanced Portfolios are built with exchange traded funds (popularly known as ETFs).

An ETF combines the benefits of a fund and a stock. Like a fund, an ETF invests in a collection of bonds, stocks and/or other asset classes. Like a stock individual ETFs can be bought or sold throughout the day as long as the market is open.

Holding a sufficient number of individual bonds and stocks to build a well-diversified portfolio requires a large investment. But with ETFs, Balanced Portfolios investors can have a cost-efficient and well-diversified solution without the need to commit a large amount of capital.

What are iShares exchange traded funds?

Saxo Bank has chosen to build its Balanced Portfolios with iShares exchange traded funds from BlackRock.

iShares is a global leader in exchange traded funds with more than a decade of expertise and commitment to individual and institutional investors of all sizes. With over 700 funds globally across multiple asset classes and strategies and more than $1 trillion in assets under management as of June 30, 2016, iShares funds help clients around the world build the core of their portfolios, meet specific investment goals and implement market views. iShares funds are powered by the expert portfolio and risk management of BlackRock, trusted to manage more money than any other investment firm.*

(*Based on $4.890 trillion in AUM as of 6/30/16)

Saxo Bank makes use of BlackRock’s research and data for the construction of its Balanced Portfolios.

BlackRock’s research and data which is utilised by Saxo Bank in building its Balanced Portfolios is based upon certain internal assumptions and BlackRock has not considered the suitability of the content of its research and data against individual needs and risk tolerances for all investors. As such, BlackRock’s research and data is for information purposes only and does not constitute investment advice or an offer to sell or a solicitation of an offer to buy the securities described within. BlackRock’s research and data has not been prepared in accordance with the legal requirement designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of the research and data provided to Saxo Bank and, as such, is considered to be a marketing communication to SaxoBank.

What does it cost?

For the provision of the service Saxo Bank charges a Service Fee of 0.9% p.a. calculated on the value of the Balanced Portfolio account. The fee is inclusive of VAT where applicable.

The Service Fee is calculated on a daily basis and charged at the end of each quarter. If you stop your investment in-between quarters the accumulated amount of Service Fee will be charged at that time.

We do not charge trading commissions when we implement your initial investment or when we rebalance your portfolio. Furthermore, we do not apply custody fees, inactivity fees or apply minimum ticket fees to your portfolio.

Please note, that if you choose a Balanced Portfolio that is denominated in a different currency than that of your funding account you will incur a currency conversion fee (0.5% of the invested amount per conversion).

The manager of the Exchange Traded Funds also charges a fee for managing the fund’s assets. This charge is called an Expense Ratio and is deducted from the value of the assets held by the fund so the price of the ETF is net of the Expense Ratio. The total Expense Ratio incurred by each Balanced Portfolio can be found in the description of each portfolio and is separate from the Service Fee.

Calculated example for the Service Fee:

A client invests 20,000 EUR on 1st April

Starting account balance is 20,000 EUR. Service Fee = 0.9% p.a., payable quarterly in arrears

The service fee is calculated every day.

The daily service fee amount is calculated according to this formula:

End of Day Account Balance * (Service Fee Percentage / 365)

The fee for the first day is calculated as follows: 20,000 * (0.009 / 365) = EUR 0.49

To simplify the example we assume that the account value remains at EUR 20,000 for April (30 days), EUR 21,000 for the rest of the quarter (May and June = 61 days)

With these assumptions the accrued service fee for the quarter can be calculated as follows:

(20,000*(0.009*(30/365)) + (21,000*(0.009*(61/365)) = EUR 46.38

Please note that the actual figure may vary slightly due to rounding.

Account situation at the end of the quarter:

Beginning of quarter account balance

20,000

P & L

1,000

End balance before fees

21,000

Service fee

(46.38)

End of quarter account balance

20,953.62

*all figures in EUR

The Service Fee is in addition to the ETFs' Expense Ratio. The Expense Ratio is deducted from the assets of the ETFs and paid to the manager of the ETFs.

What is an expense ratio?

ETFs trade like stocks with a buy and sell price on a stock exchange. Unlike stocks, an ETF has an ongoing management fee usually charged by the manager of the ETF which is deducted from the assets of the ETF. This is the Expense Ratio. The Expense Ratio is used to cover the operational expenses of the ETF.

Since a Balanced Portfolio is a collection of ETFs we publish a weighted average Expense Ratio to express the cost already embedded in the building blocks of the Balanced Portfolio. The weighted average Expense Ratio may change from time to time. Saxo Bank’s Service Fee is calculated separately and is not embedded as part of the ETF (please refer to the above section for Saxo Bank charges).

Can I try a Balanced Portfolio in a demo environment?

Unfortunately, the service is not available as a demo.

Can I stop my investment at any time?

You can stop investing at any time by simply pressing on the “Stop” button next to the strategy in your SaxoTrader platform.

When you decide to stop investing, you will be given the choice of either keeping your existing positions or closing all positions which is the default option. If you decide to close all open positions at this stage, market orders will be generated. Should the underlying markets be closed these orders will be executed as soon as the markets re-open.

Please be aware, that if you decide to keep open positions it is your own responsibility to manage them at all times. You will have to close the positions yourself after you have clicked the “Stop” button.

Can I restart an investment after I have stopped?

If you decide to stop an investment, you may reactivate your investment using the Restart button. You will be required to confirm that your financial situation has not materially changed since you last invested and you will need sufficient funds available to cover the minimum investment required.

Can I close single positions in my Balanced Portfolio?

So long as your investment is active, it is not possible to reduce or increase risk exposure at the single position level in your Balanced Portfolio.

A Balanced Portfolio should be considered as a standalone investment proposition. Either you are in or you are out.

What is the Balanced Portfolio page?

This page provides an overview of the past performance generated by the Balanced Portfolio in a real money account funded by Saxo Bank and similar to any investor account. Please be reminded that past performance is not necessarily indicative of future performance.

How is the performance of Balanced Portfolios calculated?

The percentage performance is calculated as a time-weighted performance. This calculation methodology is a standard methodology for comparing Balanced Portfolio managers from the asset management industry. Performance is based both on realized and unrealized trades.

Trade responsibly

Losses can exceed deposits on margin products. Please ensure you understand the risks.

This website can be accessed worldwide however the information on the website is related to Saxo Bank A/S and is not specific to any entity of Saxo Bank Group. All clients will directly engage with Saxo Bank A/S and all client agreements will be entered into with Saxo Bank A/S and thus governed by Danish Law.


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